Gudzelak v. PNC Bank

Filing 18

MEMORANDUM OPINION re 14 motion to dismiss. Signed by Judge Leonard P. Stark on 3/23/15. (ntl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ANDREW GUDZELAK,
Plaintiff,
Civ. No. 12-1230-LPS

v.
PNC BANK,
Defendant.

Andrew Gudzelak, Wilmington, Delaware, Pro Se Plaintiff.

Jeffrey S. Cianciulli, Esquire, Kenneth E. Aaron, Esquire, Susan M. Verbonitz, Esquire, Weir &
Partners LLP, Wilmington, Delaware.
Attorneys for Defendant.

MEMORANDUM OPINION

March 23, 2015
Wilmington, Delaware

STARK, U.S. District Judge:
I.

INTRODUCTION
Plaintiff Andrew Gudzelak ("Plaintiff') filed this action on October 1, 2012, alleging

mortgage fraud by Defendant PNC Bank ("Defendant"). (D.I. 1) The Court has jurisdiction
pursuant to 28 U.S.C. § 1331. Pending before the Court is Defendant's Motion to Dismiss Based
upon Amended Complaint. (D.I. 14) For the reasons that follow, the Court will grant the

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motion.

II.

BACKGROUND
In his original complaint, Plaintiff alleged that he entered into a mortgage agreement with

Defendant on February 6, 2004, and that he was "forced into foreclosure" by Defendant, "by and
thru one of its several assignees of the original mortgage, which constitutes manifest fraud."
(D.I. 1 at~ 5) Defendant moved to dismiss the original complaint for failure to state a claim
upon which relief may be granted pursuant to Fed. R. Civ. P. 12(b)(6) or, alternatively, for a
more definite statement pursuant to Fed. R. Civ. P. 12(e). Plaintiff responded with a more
definite statement (D.I. 6), wherein he invoked the Fraud Enforcement and Recovery Act of2009
("FERA"), Pub. L. No. 111-21, 123 Stat. 1617 (2009). In addition to mortgage fraud, he stated
that Defendant had engaged in security fraud pursuant to 18 U.S.C. § 1348(2). Plaintiff also
referred to a case brought by the United States of America under the False Claims Act ("FCA"),
31 U.S.C. § 3729, captioned United States v. Deutsche Bank, A.G., Civ. No. 11-2976-LAK
(S.D.N.Y.), stating that, "essentially, the aforesaid cite represents the substance" of his claims in
this action.

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On July 29, 2013, the Court granted Defendant's motion to dismiss the complaint. (D.I.
7) In its Memorandum Opinion, the Court explained that Plaintiff did not have a private right of
action under FERA or with respect to his security fraud allegations, and that he had not
adequately pled his claims under the FCA or for mortgage fraud. (D.I. 7 at 4, 6) Plaintiff was
given leave to amend his FCA and mortgage fraud claims. (D.1. 7 at 5-6) In his Amended
Complaint, filed on August 20, 2013, Plaintiff did not elaborate on the FCA or mortgage fraud
claims but, instead, raised several new claims. (D.I. 10) On August 22, 2013, Defendant moved
to dismiss the Amended Complaint. (D.I. 14) On September 20, 2013, Plaintiff filed a Motion
for Extension of Time to File Response/Reply as to Defendant's Motion to Dismiss. (D.1. 16)
On March 24, 2014, the Court granted Plaintiff a 30-day extension (D.I. 17) but, to date, he has
not filed any opposition to the pending motion.

III.

LEGAL STANDARDS
When a defendant fails to file an answering brief in response to a pending motion to

dismiss within the time specified by the court, the defendant's case may be dismissed for failure
to prosecute. See, e.g., Riley v. Snyder, 2003 WL 179997, *1 (D. Del. 2003) (dismissing
defendant's case for failure to prosecute upon failure "to demonstrate the requisite good cause for
his [two-year] silence"). Here, however, because Defendant's failure to file his response
followed a six-month delay by the Court in granting Defendant's Motion for Extension of Time
(D.I. 16, 17), the Court, in considering Defendant's pending motion to dismiss (D.I. 14), will
address the merits of Plaintiffs Amended Complaint.
Evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) requires
the Court to accept as true all material allegations of the complaint. See Spruill v. Gillis, 372

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F.3d 218, 223 (3d Cir. 2004). "The issue is not whether a plaintiff will ultimately prevail but
whether the claimant is entitled to offer evidence to support the claims." In re Burlington Coat

Factory Sec. Litig., 114 F .3d 1410, 1420 (3d Cir. 1997) (internal quotation marks omitted).
Thus, the Court may grant such a motion to dismiss only if, after "accepting all well-pleaded
allegations in the complaint as true, and viewing them in the light most favorable to plaintiff,
plaintiff is not entitled to relief." Maio v. Aetna, Inc., 221 F .3d 4 72, 481-82 (3d Cir. 2000)
(internal quotation marks omitted).
However, "[t]o survive a motion to dismiss, a civil plaintiff must allege facts that 'raise a
right to relief above the speculative level on the assumption that the allegations in the complaint
are true (even if doubtful in fact)."' Victaulic Co. v. Tieman, 499 F .3d 227, 234 (3d Cir. 2007)
(quoting Bell At!. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A claim is facially plausible
"when the plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). At bottom, "[t]he complaint must state enough facts to raise a reasonable expectation
that discovery will reveal evidence of [each] necessary element" of a plaintiffs claim. Wilkerson

v. New Media Tech. Charter Sch. Inc., 522 F.3d 315, 321 (3d Cir. 2008) (internal quotation
marks omitted). The Court is not obligated to accept as true "bald assertions," Morse v. Lower

Merion Sch. Dist., 132 F .3d 902, 906 (3d Cir. 1997) (internal quotation marks omitted),
"unsupported conclusions and unwarranted inferences," Schuylkill Energy Res., Inc. v.

Pennsylvania Power & Light Co., 113 F .3d 405, 417 (3d Cir. 1997), or allegations that are "selfevidently false," Nami v. Fauver, 82 F.3d 63, 69 (3d Cir. 1996).

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Because Plaintiff proceeds pro se, his pleading is liberally construed and his Amended
Complaint, "however inartfully pleaded, must be held to less stringent standards than formal
pleadings drafted by lawyers." Erickson v. Pardus, 551 U.S. 89, 94 (2007) (internal quotation
marks omitted). For this reason, the Court will consider the new claims presented in the
Amended Complaint and not limit its consideration to the FCA and mortgage fraud claims that
Plaintiff was given leave to amend.

IV.

DISCUSSION
Plaintiffs Amended Complaint asserts the following claims: (1) violation of Sections

5(a), 5(m)(l)(a) and 13(b) of the Federal Trade Commission Act ("FTCA"), 15 U.S.C.
§§ 45(a), 45(m)(l)(A), 53(b); (2) violations of Sections 807-09 and 814 of the Fair Debt
Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692; (3) violations of Section 62l(a) of the
Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681s(a); and (4) violations of the Real Estate
Settlement Procedures Act of 1974 ("RESPA"), 12 U.S.C. §§ 2605, 2607-08, 2614.
Defendant moves for dismissal on the grounds that the Amended Complaint contains

(1) allegations over which the Court lacks jurisdiction and (2) conclusory and unsubstantiated
allegations that fail to state a claim on which relief may be granted. (D.I. 14)

A.

FTCA

Plaintiff complains of various generalized "unfair acts or practices" engaged in by
Defendants in violation of the FTCA §§ 5(a), 5(m)(l)(a) and 13(b), 15 U.S.C. §§ 45(a),
45(m)(l)(A), 53(b), including: seeking to collect mortgage payments from Plaintiff after
securitizing his mortgage (D.I. 10

at~

4); profiting from myriad fees imposed on consumers

through "aggressive practices" and obfuscation of how fees break down (id.

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5, 7, 8); the use

of "suspense" accounts that "divert borrower payments away from their mortgage payments" (id.
at ii 6); failure to "timely and adequately acknowledge, investigate, and respond to" customer
complaints (id. at ii 9); and failure to timely post payments to customers' accounts (id. at iiii 1011 ). Plaintiff does not allege that any of these "unfair acts or practices" were specifically
directed toward him on any specific occasion.
As for individualized grievances, Plaintiff complains that Defendants sought to collect
fees that were not owed by Plaintiff or not permitted by contract or other law. (Id. at iiii 14-18)
However, Plaintiff does not provide examples of any specific instances of the alleged
misrepresentations. While many of Plaintiffs allegations closely track allegations made by the
Federal Trade Commission ("FTC") against other lending institutions, see, e.g., FTC v. EMC

Mortgage Corp., No. 4:08-CV-338 (E.D. Tex. Sept. 9, 2008), the FTCA does not provide for a
private right of action, see 15 U.S.C. § 45; see also FTC v. Klesner, 280 U.S. 19, 25 (1929).
Hence, Plaintiffs claims under the FTCA fail and further elaboration of these claims would be
futile.

B.

FDCPA

Plaintiff also raises claims under the FDCPA §§ 807-09, 15 U.S.C. § 1692(e-g), alleging
that Defendant generally misrepresented debt and collection information and "used unfair or
unconscionable means" of debt collection, including the collection of unauthorized amounts and
failure to notify Plaintiff of his rights with respect to defaulted loans. (D .I. 10 at iiii 21, 23)
Plaintiff does not allege with any particularity instances in which he was individually subject to
such practices. In any case, Defendant, an original creditor, is not governed by the FDCPA,

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which only governs third-party debt collectors. See FDCPA § 803(6), 15 U.S.C. § 1692(a).

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Hence, Plaintiffs claims under the FDCPA §§ 807-09 fail and further elaboration of these claims
would be futile.
Plaintiff further claims that the alleged violations of the FDCPA amount to violations of
the FTCA pursuant to FDCPA § 814. (D.I. 10 at~ 24) This claim fails for the same reasons that
Plaintiffs claims under FDCPA §§ 807-09 fail. Again, amendment would be futile.

C.

FCRA

Plaintiff appears to make conclusory assertions that Defendant violated FCRA § 621(a),
15 U.S.C. § 1681s(a), which Plaintiff alleges entitles him to monetary civil penalties. (D.1. 10 at
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27-28) However, Section 62l(a) may only be enforced by "the Federal agencies and officials

and the State officials identified in section 1681s." FCRA § 62l(d), 15 U.S.C. § 168ls(d).
Hence, Plaintiffs claims under the FCRA fail and further elaboration of these claims would be
futile.

D.

RESP A

Plaintiff appears to invoke the jurisdiction of RESP A § 16, 12 U .S.C. § 2614, in support
of his prayer for relief. (See D.I. 10) Defendant points out that Plaintiffs reference to Section 16
of the RESP A is not supported by "any allegations upon which a claim under RESP A can be
made." (D.I. 14 at~ 22) Section 16 of the RESP A provides individuals with a private right of
action with respect to violations of Section 6 ("Servicing of Mortgage Loans and Admn. of
Escrow Accounts"), 8 ("Prohibition against Kickbacks and Unearned Fees"), and 9 ("Title
Companies"). 12 U.S.C. §§ 2605, 2607, 2608. While the allegations regarding mortgage
securitization (D.I. 10 at~ 4) and unauthorized fees (id

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5, 7, 8) might come within the

scope of Sections 6 and 9, respectively, Plaintiffs generalized and concl usory allegations -

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which merely track similar allegations made by the FTC against other lenders, see, e.g., EMC
Mortgage Corp. - do not exhibit sufficient particularity with respect to injuries suffered by

Plaintiff to allow his claims to survive a motion to dismiss. In the absence of further clarification
regarding the circumstances under which either (1) the alleged securitization of Plaintiffs
mortgage did not comply with Section 6 or (2) the unauthorized fees were collected in violation
of Section 9, Plaintiffs claims under the RESP A also fail. Given Plaintiffs failure to prosecute
the action, the Court will not permit amendment at this time.

E.

Mort2a2e Fraud

Plaintiffs Amended Complaint does not sufficiently allege mortgage fraud. While
unclear, it appeared that in his original complaint Plaintiff was attempting to allege mortgage
fraud, given his references to perfecting and filing a security interest under Delaware law for real
property located in Wilmington, Delaware. (See D.I. 1 at iJ 8) To state a claim for fraud under
Delaware law, a plaintiff must allege: "(1) defendant made a false representation; (2) with
knowledge or belief of its falsity or with reckless disregard for the truth; (3) with an intent to
induce the plaintiff into acting or refraining from acting; (4) plaintiff reasonably relied upon the
misrepresentation; and (5) plaintiff was damaged as a result of the reliance." Segovia v. Equities
First Holdings, LLC, 2008 WL 2251218, at *21 (Del. Super. Ct. May 30, 2008).

The Amended Complaint does not plead each of these elements. Nor does it meet the
requirements for pleading fraud pursuant to Fed. R. Civ. P. 9(b), which obligate a plaintiff
alleging fraud to state the circumstances of the alleged fraud with sufficient particularity to place
the defendant on notice of the "precise misconduct with which [it is] charged." Frederico, 507

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F.3d at 200. Under the circumstances, the Court will not provide Plaintiff yet another
opportunity to amend his mortgage fraud claims.

F.

FCA

Plaintiffs Amended Complaint does not revisit the FCA claims or provide any further
details regarding the date, place, or time of the alleged fraud. See Frederico v. Home Depot, 507
F.3d 188, 200 (3d Cir. 2007). His FCA claims, then, remain deficient. The Court will not
provide another opportunity amend the FCA claims.

V.

CONCLUSION
For the reasons stated above, the Court will grant Defendant's motion to dismiss. An

appropriate Order will be entered.

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