Gudzelak v. PNC Bank

Filing 8

MEMORANDUM OPINION - Signed by Judge Leonard P. Stark on 7/29/13. (rwc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ANDREW GUDZELAK,
Plaintiff,

v.

Civ. No. 12-1230-LPS

PNCBANK,
Defendant.

Andrew Gudzelak, Wilmington, Delaware, Pro Se Plaintiff.
Kenneth E. Aaron, Esquire, Weir & Partners LLP, Wilmington, Delaware. Counsel for
Defendant.

MEMORANDUM OPINION

July 29,2013
Wilmington, Delaware

I.

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

alleging mortgage fraud by Defendant PNC Bank ("Defendant) pursuant to Title 36. 1 The Court
has jurisdiction pursuant to 28 U.S.C. § 1331. Presently before the Court is Defendant's Motion
to Dismiss or, in the alternative, for a More Definite Statement (D.l. 4). For the reasons that
follow, the Court will grant the Motion to Dismiss, and will give Plaintiff leave to amend.

II.

BACKGROUND
Plaintiff alleges that he entered into a mortgage agreement with Defendant on February 6,

2004. He alleges that Defendant received "bailout disbursements" that were "allocated by the.
United States government to aid in the financial turmoil surrounding mortgages and other
financial difficulties in the Nation." (D.l. 1 at ~ 4) Plaintiff alleges that he was "forced into
foreclosure" by Defendant "by and thru one of its several assignees of the original mortgage,
which constitutes manifest fraud." (Id. at ~ 5) Plaintiff perfected a security interest in the
property at issue pursuant to 6 Del. C. § 9-202. (Id. at ~ 8)
Plaintiff seeks a temporary restraining order "because of the manifest fraud presented by"
Defendant and to "prohibit the alleged fraud from continuing in the form of 'mortgage payments'
and/or demurring the obligation to repay" Plaintiff and make him whole. (Id. at ~7) He also
seeks compensatory damages and treble damages. Finally, Plaintiff alleges that he is "exempt

IPlaintiff provided this information on the Civil Cover Sheet, but did not provide a
complete statutory citation.
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from any attempts" by Defendant "regarding any alleged mortgage payments, the propriety of the
instant complaint, ... or any other legal issues." (ld. at ~ 12)
Defendant moves to dismiss 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.L 6), wherein he
invokes the Fraud Enforcement and Recovery Act of2009 ("FERA"), Pub. L. No. 111-21, 123
Stat. 1617 (2009). In addition to mortgage fraud, he now states that Defendant engaged in
security fraud pursuant to 18 U.S.C. § 1348(2). Plaintiff also refers to a case brought by the
United States of America under the False Claims Act ("FCA"), 31 U.S.C. § 3729, entitled 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. As discussed below,
Plaintiff's More Definite Statement did not cure the Complaint's pleading deficiencies.

III.

LEGAL STANDARDS
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
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 472, 481-82 (3d Cir. 2000)
(internal quotation marks omitted).

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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 Atl. 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). Nor is the Court obligated to accept as true "bald assertions," Alorse v. Lower

Alerion 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 "self­
evidently false." Nami v. Fauver, 82 F.3d 63, 69 (3d Cir. 1996). Because Plaintiff proceeds pro

se, his pleading is liberally construed and his 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).

IV.

DISCUSSION
Defendant moves for dismissal on the grounds that the Complaint contains conclusory

and unsubstantiated allegations that fail to state a cause of action upon which relief may be
granted. While not clear, it appears the Plaintiff attempts to raise the following claims:

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(1) violation of the Troubled Asset Relief Program ("TARP"), 12 U.S.C. § 5211, as enacted
under the Emergency Economy Stabilization Program of2008 ("EESA"), 12 U.S.C.

~

5201;

(2) violation of the FCA; and (3) mortgage fraud

A.

TARP and EESA

As Defendant notes, Plaintiff appears to be asserting a claim against it because Defendant
received monies under TARP, as Plaintiff refers to "bailout disbursements" received by
Defendant. (D.1. 1 at ~ 4) However, neither T ARP nor EESA provide for a private right of
action. See Miller v. Chase Home Fin., LLC, 677 F.3d 1113 (1Ith Cir. 2012); Thomas v.

Pentagon Fed. Credit Union, 393 F. App'x 636 (11 th Cir. Aug. 19,2010); Dugger v. Bank of
Am., 2010 WL 3258383, at *2 (E.D. Mo. Aug. 16,2010). Hence, to the extent Plaintiff is
attempting to raise an EESA or T ARP claim, these claims fail. Amendment of these claims
would be futile.

B.

FCA

Plaintiff attempts to raise a claim under the False Claims Act, 31 U.S.C. § 3729, relying
on United States v. Deutsche Bank, A.G., Civ. No. 11-2976-LAK (S.D.N.Y.). (See D.1. 1 at ~ 6)
A private individual, otherwise known as a relator, may bring a civil action in the name of the
United States to enforce this provision of the FCA and may share a percentage of any recovery
resulting from the suit. See 31 U.S.C. § 3730(b) & (d). The primary purpose of the FCA is to
indemnify the government - through its restitutionary penalty provisions - against losses caused
by a defendant' fraud. See United States ex ref. Wilkins v. United Health Group, Inc., 659 F.3d
295,304-05 (3d Cir. 2011).

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To establish a prima facie violation of the FCA under section 3729(a)(1), a plaintiff must
prove that: "(1) the defendant presented or caused to be presented to an agent of the United States
a claim for payment; (2) the claim was false or fraudulent; and (3) the defendant knew the claim
was false or fraudulent." Id at 305. A plaintiff may satisfY the fraud requirement by pleading
the date, place, or time of the fraud, or by using an alternative means of injecting precision and
some measure of substantiation into the allegations of fraud. See Frederico v. Home Depot, 507
F.3d 188,200 (3d Cir. 2007). The Complaint here does neither of these things.
The FCA claim is deficiently pled. Therefore, the Court will grant the Motion to Dismiss
the claim, but will give Plaintiff leave to amend this claim.

C.

Mortlale Fraud

While not clear, it appears that Plaintiff is 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.L 1 at ~ 8) To state a claim for fraud under Delaware law,
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 Complaint does not meet these pleading requirements. Nor does it meet the
requirements for pleading fraud pursuant to Fed. R. Civ. P. 9(b), which requires that a plaintiff
alleging fraud must state the circumstances of the alleged fraud with sufficient particularity to

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place the defendant on notice of the "precise misconduct with which [it is] charged." Frederico,
507 F.3d at 200.
Therefore, the Court will grant the Motion to Dismiss the mortgage fraud claim. Plaintiff
will be given to amend this claim.

D.

Securities Fraud

In Plaintiffs More Definite Statement, he appears to seek leave to amend to add a claim
under 18 U.S.C. § 1348(2). This is a criminal statute which defines a federal crime. It does not
provided a private cause of action for a civil Plaintiff. See Troyer v. Hershberger, 2012 WL
488251, at *8 (N.D. Dh. Feb. 14,2012). Therefore, the Court will deny Plaintiffleave to amend
to add this claim on the basis of futility of amendment.

E.

Injunctive Relief

Plaintiff seeks injunctive re1iefpursuant to Fed. R. Civ. P. 65(b) on the grounds that an
"order would prohibit the alleged fraud from continuing in the form of 'mortgage payments'
an/or demurring the obligation to repay the plaintiff and make him whole." (D.I. 1 at ~ 7) "A
preliminary injunction is an extraordinary remedy that should be granted only if: (1) the plaintiff
is likely to succeed on the merits; (2) denial will result in irreparable harm to the plaintiff;
(3) granting the injunction will not result in irreparable harm to the defendant; and (4) granting
the injunction is in the public interest." NutraSweet Co. v. Vit-Mar Enters., Inc., 176 F.3d 151,
153 (3d Cir. 1999).
Plaintiff has failed to show an entitlement to injunctive relief, particularly as he has failed
at this point to show a likelihood of success on the merits. Therefore, the Court will grant
Defendant's Motion to Dismiss this portion of the Complaint.

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V.

CONCLUSION
For the above reasons, the Court will grant the Motion to Dismiss. (D.I. 7) Plaintiff will

be given leave to amend the False Claims Act and the mortgage fraud claims. All other claims
are dismissed with prejudice. The Court will deny Plaintiff leave to amend motion to the extent
that Plaintiff seeks to amend to add a criminal security fraud claim.
An appropriate Order will be entered.

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