In Re: Bishop et al.

Filing 24

MEMORANDUM OPINION re 10 MOTION to Dismiss, 18 Motion For Reconsideration, and 21 Motion to Change Venue. Signed by Judge Richard G. Andrews on 3/21/2014. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
IN RE:

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BISHOP., et al.,
Debtors.
ROMIE D. BISHOP,
Appellant,

v.
FEDERAL NATIONAL MORTGAGE
ASSOCIATION INC., et al.,
Appellees.

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Chapter 13
Bankr. No. 11-12338(BLS)
Adv. Pro. No. 12-50912(BLS)

Civ. No. 13-977-RGA

Ramie D. Bishop, Middletown, Delaware; ProSe Appellant.
Eric John Monzo, Esq., Morris James LLP, Wilmington, Delaware; Counsel for
Appellees.

MEMORANDUM OPINION

a.

March
2014
Wilmington, Delaware

Appellant Romie D. Bishop filed this bankruptcy appeal on June 3, 2013. He
appears pro se. His appeal arises from dismissal of the amended complaint in an
adversary proceeding he brought in the United States Bankruptcy Court for the District
of Delaware against Federal National Mortgage Association, Inc., Fannie Mae CMO,
Inc., and Federal National Mortgage Association, Bishop v. Federal National Mortgage
Assoc., Inc., Adv. Pro. No. 12-50912(BLS) (Bankr. D. Del.), and the denial of his motion

for reconsideration.

I. BACKGROUND 1
Debtors Romie David Bishop and Shirley Ann Bishop purchased real property in
Wilmington, Delaware in May 2007. The Bishops borrowed money for the purchase
from Cardinal Financial Company with Mortgage Electronic Registration Systems, Inc.
as the nominee for Cardinal and the mortgagee. See CitiMortgage, Inc. v. Bishop,
2013 WL 1143670 (Del. Super. Ct. 2013). The Bishops executed the mortgage on May
4, 2007. /d. at *1. The loan was evidenced by a promissory note and secured by a
mortgage on the property. /d. On May 17, 2007, CitiMortgage, Inc. became the
servicer and investor (i.e., owner) of the note and mortgage. /d. at *4. Fannie Mae2

1

The recitation of background mostly comes from the Superior Court's opinion,
and is recited simply to frame the issues. As noted infra, for procedural reasons, the
Superior Court's opinion cannot be relied upon to establish the relevant facts.
2

The name Fannie Mae is an acronym for Federal National Mortgage
Association. See Delaware Cnty., Pa. v. Federal Hous. Fin. Agency, 2013 WL
1234221, at *1 n.1 (E.D. Pa. Mar. 26, 2013).

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purchased the note and mortgage on June 28, 2007 (see Adv. Pro. No. 12-50912(BLS),
D.l. 4, ~ 23), and CitiMortgage continued to service the note and mortgage.

Citimortgage, 2013 WL 1143670, at *4, *6; see also Adv. Pro. No. 12-50912(BLS) at
D.l. 16, Ex. A. On July 17, 2009, MERS, as nominee for Cardinal, assigned and
transferred the mortgage to CitiMortgage, pursuant to an assignment of mortgage. See

CitiMortgage, Inc., 2013 WL 114360, at *2. On November 12, 2009, a confirmatory
assignment of mortgage was executed between MERS, as Cardinal's nominee, and
CitiMortgage to "correct a computer generated error setting forth the incorrect date of
the Notary Signature." /d.
The debtors stopped making payments on the note in early November 2008. /d.
at *3. On July 27, 2009, CitiMortgage initiated a foreclosure action in the Superior
Court of the State of Delaware in and for New Castle County. /d. The debtors
challenged the validity of the assignment and the confirmatory assignment, arguing that
the documents were deficient and fraudulent. /d. On July 27, 2011, the debtors filed a
petition for bankruptcy relief under Chapter 13 in the United States Bankruptcy Court for
the District of Delaware, In re: Bishop, Bankr. No. 11-12338(BLS). The foreclosure
action was set to be tried on October 31, 2011, but the matter was stayed by the
bankruptcy court.
On January 17, 2012, Appellant instituted an adversary proceeding and filed a
complaint against CitiMortgage and other defendants asserting causes of action under
state and federal statutes. See Bishop v. CitiMortgage, Inc., Adv. Pro. No.
12-50077(BLS) (Bankr. D. Del.) at D.l. 1. The CitiMortgage defendants filed a motion to

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dismiss and asked the bankruptcy court to abstain from hearing the complaint due to its
foundation in the foreclosure action. See Adv. Pro. No. 12-50077(BLS) at D.l. 36 and
37.
On October 3, 2012, Appellant filed a second adversary complaint in Bishop v.
Federal National Mortgage Association, Inc., Adv. Pro. No. 12-50912(BLS) (Bankr. D.

Del.), amended October 12, 2012, the adversary proceeding that he now appeals. /d.
at D.l. 1, 4. On November 13, 2012, the Appellees filed a motion to dismiss arguing
that Appellant lacked standing and that the amended adversary complaint failed to state
a claim upon which relief could be granted. /d. at D.l. 15, 16. In addition, Appellees
argued that the allegations were confusing, difficult to follow, impossible to respond to,
and that Appellant offered no evidence that Federal National Mortgage Association, Inc.
or Fannie Mae CMO were viable entities. /d. D. I. 16. Appellant did not respond to the
motion to dismiss. Instead, he filed a motion to strike the motion to dismiss. /d. at D. I.
23. The bankruptcy court held the matter in abeyance due to the Superior Court
mortgage foreclosure case.
The bankruptcy court had granted relief from the stay on May 21, 2012, and, in
January 2013, the foreclosure proceeding was tried in the Superior Court. See In Re:
Bishop, Bankr. No. 11-12338(BLS) at D.l. 211. The Superior Court issued its

memorandum opinion on March 4, 2013, rejected Appellant's arguments that the
assignments were "deficient and fraudulent," found in favor of CitiMortgage, and
permitted CitiMortgage to foreclose on the property. See CitiMortgage, Inc., 2013 WL
114360.

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On March 8, 2013, oral argument was heard on the motion to dismiss the
adversary proceeding that is the subject of this appeal, Adv. Pro. No. 12-50912(BLS).
See In Re: Bishop, Bankr. No. 11-12338(BLS) at 0.1. 404. The bankruptcy court

considered Appellant's motion to strike as a response to the motion to dismiss. Adv.
Pro. No. 12-50912(BLS) at 0.1. 33. On March 27, 2013, the bankruptcy court granted
the motion to dismiss. It found the Superior Court's opinion persuasive and dispositive
of Appellant's arguments regarding CitiMortgage's standing and whether the
assignments were deficient and fraudulent, and stated that it would not revisit the
issues. In addition, the bankruptcy court found that Appellant's allegations failed to
state a claim upon which relief may be granted pursuant to Fed. R. Civ. P. 12(b)(6). /d.
at 0.1. 33 at 2, 1f1f4, 5. Appellant filed a motion for reconsideration, but the bankruptcy
court rejected Appellant's arguments and found that he had not met the applicable
standard for reconsideration. 3 /d. at 0.1. 39.
Appellant filed the instant appeal on May 16, 2013. (ld. at 0.1. 42). The appeal
was opened in this Court on June 3, 2013. (0.1. 1). On July 30, 2013, Appellant filed a
lengthy brief. (0.1. 8). On August 13, 2013, Appellees filed a brief and motion to
dismiss the appeal, and Appellant responded with a motion to strike the motion to
dismiss. (0.1. 10, 11, 13). This Court denied the motion to strike on November 6, 2013,
and gave Appellant additional time to file a response to Appellees' brief. (0.1. 17). On
November 12, 2013, Appellant filed a motion for reconsideration of the November 6,

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In Appellant's motion for reconsideration, he argued that the bankruptcy court
erred in relying upon the March 4, 2013 Superior Court Order as it was under appeal.
(Adv. Pro. No. 12-50912(BLS), 0.1. 37 at 2).

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2013 order, which was opposed by Appellees. (D.J. 18, 19). He also filed a responsive
brief to Appellees' motion to dismiss the appeal on November 27, 2013. (D.I. 20). On
the same day, Appellant filed a motion to change venue of this matter to the United
States District Court for the Middle District of Florida. (D.I. 21 ). Thus, on the merits of
the appeal, the briefs are at D. I. 8, 11, and 20. (See D. I. 17, describing history).
The Court turns first to Appellant's motion for reconsideration and motion to
change venue.

II. MOTION FOR RECONSIDERATION
The purpose of a motion for reconsideration is to "correct manifest errors of law
or fact or to present newly discovered evidence." Max's Seafood Cafe ex ref. Lou-Ann,
Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). "A proper Rule 59(e) motion ...

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must rely on one of three grounds: (1) an intervening change in controlling law; (2) the
availability of new evidence; or (3) the need to correct a clear error of law or fact or to
prevent manifest injustice." Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir. 201 0)
(citing N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995)).
The Court finds that Appellant has failed to demonstrate any of the
aforementioned grounds to warrant a reconsideration of the Court's November 6, 2013
memorandum order (0.1. 17) that denied his motion to strike Appellees' motion to
dismiss. Therefore, the Court will deny Appellant's motion for reconsideration. (0.1.
18).

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Ill. CHANGE OF VENUE
Appellant moves for a change of venue pursuant to 28 U.S.C. § 1404(b) based
upon his lack of confidence in this Court and his belief that he will not receive a fair
hearing in violation of his right to due process. (0.1. 21 ). In reading the motion, it
appears that Appellant seeks a change of venue because he is unhappy with this
Court's November 6, 2013 ruling. (See 0.1. 17). Appellant moves to change venue
from this Court to the United States District Court for the Middle District of Florida or
"any other Circuit that does not border the Third's Circuit's jurisdiction." (/d.)
Section 1404(b) provides that, "[u]pon motion, consent or stipulation of all
parties, any action, suit or proceeding of a civil nature or any motion or hearing thereof,
may be transferred, in the discretion of the court, from the division in which pending to
any other division in the same district." When determining whether to transfer a case
between divisions (an "intradistrict transfer"), courts are guided by the same factors that
apply to transfers between districts (an "interdistrict transfer"). See Zanghi v. Freight
Car Am., Inc., 2014 WL 130985, at *9 (W.O. Pa.2014). "At a minimum the Court must

consider whether a transfer would be convenient to the parties and witnesses and in the
interest of justice." (/d.) (citations omitted).
Appellant invokes§ 1404(b) which provides for an intradistrict transfer, but states
that he wishes his case to be heard in any Circuit that does not border the Third Circuit.
He rests his motion on an incorrect statute. In addition, having reviewed the motion, the
Court determines that Appellant has not provided sufficient grounds to change venue

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and transfer the matter from this Court. Accordingly, the Court will deny the motion.
(D.I. 21 ).

IV. BANKRUPTCY APPEAL
A. Standard of Review
This court has jurisdiction to hear an appeal from the bankruptcy court pursuant
to 28 U.S.C. § 158(a). In undertaking a review of the issues on appeal, the court
applies a clearly erroneous standard to the bankruptcy court's findings of fact and a
plenary standard to that court's legal conclusions. See American Flint Glass Workers
Union v. Anchor Resolution Corp., 197 F.3d 76, 80 (3d Cir. 1999).

"Generally, an appellant's failure to present and argue issues in the opening brief
would result in waiver of the issues on appeal. See Kost v. Kozakiewicz, 1 F.3d 176,
182 (3d Cir.1993); Fed. R. App. P. 28(a). However, [appellant] proceeds prose, and
accordingly, we construe his pleadings liberally." Laughlin v. Peck, 2014 WL 115201
(3d Cir. 2014) (citing Haines v. Kerner, 404 U.S. 519, 520-21 (1972)).

B. Discussion
While not set forth specifically, Appellant appears to raise the following issue for
review: whether the bankruptcy court erred in granting Appellees' motion to dismiss the
amended complaint in Adv. Pro. No. 12-50912(BLS) and in denying his motion for
reconsideration.
Appellees move for dismissal of the appeal on the grounds that Appellant failed
to specify any appealable issue for the Court to consider. Appellant responds that he
does not argue the merits of the motion to dismiss "for the motion to dismiss is not to be

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considered anyway." (D. I. 20 at 3, 118). Appellant asks the Court to deny the motion to
dismiss, reverse the bankruptcy court's orders and remand the matter for a full hearing
(or, alternatively, to enter a judgment of default for Appellees' attorney "filing papers
without first creating standing."). (/d. at 4).
The amended adversary complaint raises claims under the Truth in Lending Act,
15 U.S.C. § 1641, and alleges that the assignment to CitiMortgage is not legal. Adv.
Pro. No. 12-50912(BLS) at 0.1. 4.
Appellant's Opening Brief (D. I. 8) concentrates on a number of issues that
cannot reasonably be argued. For example, Appellant argues that Fannie Mae's
attorneys did not properly enter their appearance. (D. I. 8 at 18, points "d" & "e"). The
relevant rule, however, states, "An attorney appearing for a party in a case ... shall file
a notice of appearance with the attorney's name, office address and telephone number,
unless the attorney's appearance is otherwise noted in the record." Fed. R. Bankr. P.
901 O(b). The first appearance by Fannie Mae's attorneys in the adversary proceeding
was on November 13, 2012, and its motion noted that Fannie Mae was filing the
pleading "through their attorneys," who were then listed on the second page with their
names, office addresses, and telephone number, as well as the notation, "Counsel for
[the Defendants]." (Adv. Proc. No. 12-50912(BLS), 0.1. 15). Appellant does not and
cannot argue that he did not know who was representing Fannie Mae. His argument
that the bankruptcy court committed some sort of error by not striking Fannie Mae's
pleadings is therefore without merit. His further argument that therefore Fannie Mae (or
its attorneys) did not have standing to file a motion to dismiss the amended complaint

(0.1. 8 at 17-18, points "a" & "c") is thus also without any merit. He also argues that the

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bankruptcy court "abused its discretion by ruling in favor of a filing that made no
allegations for the Court to consider." (0.1. 8 at 18, point "b"). A review of the motion to
dismiss and the accompanying brief (Adv. Pro. No. 12-50912(BLS), 0.1. 15, 16)
indicates that it made three arguments, two of which involved Appellant's lack of
standing and the complaint's failure to state a claim upon which relief could be granted.
Thus, the bankruptcy court did not abuse its discretion in ruling on the motion.
An additional argument that Appellant makes is that the bankruptcy court
improperly considered documents submitted with the motion to dismiss. "In deciding
motions to dismiss pursuant to Rule 12(b)(6), courts generally consider only the
allegations in the complaint, exhibits attached to the complaint, matters of public record,
and documents that form the basis of a claim." Lum v. Bank of America, 361 F.3d 217,
221 n.3 (3d Cir. 2004). The only document that the bankruptcy court relied upon was
Judge Scott's opinion, which the bankruptcy court could properly use for some
purposes, but not for others. "While a prior judicial opinion constitutes a public record
of which a court may take judicial notice, it may do so on a motion to dismiss only to
establish the existence of the opinion, not for the truth of the facts asserted in the
opinion." /d. When the document is specifically referenced in the complaint, the court
may examine the decision to see if it contradicts the complaint's legal conclusions or
factual claims. See Southern Cross Overseas Agencies, Jnvc. v. Wah Kwong Shipping
Group Ltd., 181 F.3d 410,427 (3d Cir. 1992). Thus, the bankruptcy court's holding-

that the Superior Court had decided a number of the issues and that those issues need
not be revisited - may have gone beyond what was permitted by Third Circuit

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precedent. In essence, the bankruptcy court's decision converted the motion to dismiss
on those issues into a summary judgment proceeding.

1. Res Judicata
In granting the motion to dismiss, the bankruptcy court determined that the
Superior Court's findings had a preclusive effect on certain issues raised in the
adversary proceeding. A court may decide a Rule 12(b)(6) motion to dismiss based on
preclusion grounds so long as the affirmative defense of preclusion is apparent on the
face of the complaint. See Brody v. Hankin, 145 F. App'x 768, 771-72 (3d Cir. 2005).
Res judicata or claim preclusion "requires a showing that there has been: (1) a
final judgment on the merits in a prior suit involving (2) the same claim, and (3) the
same parties or their privies." E.E.O.C. v. United States Steel Corp., 921 F.2d 489, 493
(3d Cir. 1990). Collateral estoppel or issue preclusion, requires of a previous
determination that: "(1) the identical issue was previously adjudicated; (2) the issue
was actually litigated; (3) the previous determination was necessary to the decision; and
(4) the party being precluded from relitigating the issue was fully represented in the
prior action." United States v. 5 Unlabeled Boxes, 572 F.3d 169, 173-74 (3d Cir. 2009).
The "preferred usage" of the term res judicata "encompasses both claim and issue
preclusion." /d. at 174.
As determined by the bankruptcy court:
The Debtors make the same arguments here -challenging Citi's standing
on the grounds that Citi is not the servicer or owner of the loan, and the
mortgage and note, or assignments thereof, are deficient and fraudulenton claims that were litigated and adjudicated in Citi's favor by the Superior
Court. As such, this Court will not revisit those issues.

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See Adv. Pro. No. 12-50912(BLS) at D. I. 33,

1f 4.

The bankruptcy court found the

Superior Court's opinion persuasive and dispositive of Appellant's arguments with
regard to bankruptcy proof of claims Nos. 12 and 16. /d. The foreclosure action was
tried in Superior Court and the issues asserted were actively litigated. Hence, the
Superior Court's findings appear to preclude Appellant from raising claims that
challenge CitiMortgage's standing and/or that the mortgage and note at issue, or
assignments thereof, are deficient and fraudulent. 4 Nevertheless, since it appears that
the wrong procedural vehicle (a motion to dismiss rather than a motion for summary
judgment) was used, the Court will vacate this portion of the order (0.1. 33,

1f 4) for

further consideration using the summary judgment standard. The Court has considered
whether harmless error might apply, see Brody, 145 F. App'x at 773 n.7, and believes
that it is a close question. In view of the Court's decision to remand the case on other
grounds infra, the Court believes the better course is also to do so on this ground.

2. Standing
A review of the first amended adversary complaint reveals that Appellant
incorrectly equates the July 19, 2009 assignment and the November 12, 2009
confirmatory assignment to CitiMortgage with disclosure statements that are required

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As previously noted (page 5, footnote 3), Appellant stated on reconsideration
that he was working on an appeal of the State court action. It does not appear that
Appellant actually appealed the decision of the Superior Court to the Delaware
Supreme Court. No one has cited the case number of an appeal. Further, it appears
that the appeal was taken to the Bankruptcy Court. (Bankr. No. 11-12338(BLS), 0.1.
408 (noticing an appeal from the opinion of Judge Scott dated March 4, 2013)). The
Bankruptcy Court does not have jurisdiction of appeals from Superior Court. Thus, it
appears that the Superior Court decision is a final judgment.
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under the Truth in Lending Act. See 15 U.S.C. § 1641 (a). 5 The Truth in Lending Act
provides for penalties if the creditor fails to make certain disclosures required under the
statute. See 15 U.S.C. § 1640(a). The amended adversary complaint alleges that the
assignment and confirmatory assignment are false. See Adv. Pro. No. 12-50912(BLS)
at D. I. 4,

'f'f 1-8, 22-44, 52-58, 60-63, 70, 73-75).

In addition, it alleges that the

assignment to CitiMortgage is not legal. /d. at 1f 59. As discussed above, the Superior
Court rejected these arguments.
Generally, to have standing, a plaintiff must be a party to or a third-party
beneficiary of the disputed contract. NAMA Holdings, LLC v. Related Work Market Ctr.,

LLC, 922 A.2d 417, 434 (Del. Ch. Ct. 2007). Courts have routinely found that a debtor
may not challenge an assignment between an assignor and assignee. See In re

Walker, 466 B.R. 271, 285-86 (E.D. Pa. Bankr. 2012) (debtor lacked standing to
challenge the assignment of the note because the debtor was unaffected by the
assignment); see also Livonia Property Holdings, L.L.C. v. 12840-12976 Farmington

Road Holdings, 717 F. Supp. 2d 724 (E. D. Mich. 201 0) (plaintiff borrower did not have
standing to dispute the validity of an assignment between assignor and assignee
because plaintiff was "a non-party to those documents."). Based upon the
well-established law in this area, Appellant lacks standing to challenge the mortgage
assignment. Thus, the bankruptcy court correctly dismissed those claims.

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Pursuant to § 1641 (a): "a violation apparent on the face of the disclosure
statement includes, but is not limited to (1) a disclosure which can be determined to be
incomplete or inaccurate from the face of the disclosure statement or other documents
assigned, or (2) a disclosure which does not use the terms required to be used by this
subchapter." 15 U.S.C. § 1641(a).
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3. Truth in Lending Act
Finally, the bankruptcy court dismissed the amended adversary complaint
pursuant to Fed. R. Civ. P. 12(b)(6) "to the extent that debtors assert additional
arguments not asserted or decided in Superior Court" for failure to state a claim upon
which relief could be granted. Adv. Pro. No. 12-50912(BLS) at 0.1. 33,

1f 5.

The

bankruptcy court did not specify the "additional arguments." However, as best as can
be discerned, it appears that they are the claims raised under 15 U.S.C. § 1641(g). 6
Appellant alleges that Appellees failed to comply with § 1641 (g) which provides that the
creditor that is the new owner or assignee of the debt shall give notice to a borrower
within thirty days after the date on which a mortgage loan is sold or otherwise
transferred or assigned to a third party. See Adv. Pro. No. 12-50912(BLS) at D. I. 4,

1m

9-14,45-51,64-69, 71-72.
A complaint will survive a Rule 12(b)(6) motion only if it states "sufficient factual
allegations, accepted as true, to 'state a claim for relief that is plausible on its face."
Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Bell Atlantic v. Twombly, 550 U.S. 544,
570 (2007)). The pleading standard will be met if the complaint "pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). While
the complaint need not demonstrate that a defendant is probably liable for the
wrongdoing, allegations that give rise to the mere possibility of unlawful conduct will not

6

See Adv. Pro. No. 12-50912(BLS), 0.1. 39, 1}4 (referring to "Federal statutory
claims"). The Truth in Lending claims were not at issue in the Delaware mortgage
foreclosure case.
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do. Iqbal, 556 U.S. at 679; Twombly, 550 U.S. at 557. Federal Rule Civil Procedure
8(a) "requires not merely a short and plain statement, but instead mandates a
statement 'showing that the pleader is entitled to relief." Phillips v. County of Allegheny,
515 F.3d 224, 234 (3d Cir. 2008).
An action under § 1641 (g) can only be brought against creditors or their
assignees. See Mourad v. Homeward Residential, Inc., 517 F. App'x 360, 364 (6th Cir.
2013). Where a complaint fails to allege any facts showing that the defendant falls
within Truth in Lending Act's definition of "creditor," the complaint fails to state a claim.

See Dufour v. Home Show Mortgage Inc., 2012 WL 6049683, *6 (D. Ariz. Dec. 5, 2012)
(dismissing§ 1641(g) claim where complaint failed to allege sufficient facts to show that
defendant, the beneficiary under a deed of trust, was a Truth in Lending Act "creditor").
Under§ 1641 (g), the "disclosure obligation is triggered only when ownership of
the 'mortgage loan' or 'debt' itself is transferred, not when the instrument securing the
debt (that is, the mortgage) is transferred." See Giles v. Wells Fargo Bank, 519 F.
App'x 576, 578 (11th Cir. 2013) (per curiam). Regulation Z, provides that a person is
covered by § 1641 (g) if he or she "becomes the owner of an existing mortgage loan by
acquiring legal title to the debt obligation, whether through a purchase, assignment or
other transfer." 12 C.F.R. § 1026.39(a)(1). "[C]ase law confirms that what matters for
§ 1641 (g) purposes is transfer of the debt obligation, not merely assignment of the
mortgage." Connell v. CitiMortgage, Inc., 2012 WL 5511087, *8 (S.D. Ala. Nov. 13,
2012) (listing supporting cases).

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Appellant proceeds prose and his pleadings must be liberally construed. While
not totally clear, it seems that Appellant attempted to raise claims under § 1641 (g) of
the Truth in Lending Act for the alleged failure to provide him notice of the assignment
as required under§ 1641 (g) of the Truth in Lending Act.1 The bankruptcy court
dismissed the amended adversary complaint for failure to state a claim upon which
relief may be granted. I agree that the amended complaint does not state a claim upon
which relief can be granted. The bankruptcy court did not indicate whether the pleading
defects could be cured upon amendment. Even when a plaintiff does not seek leave to
amend, if a complaint is vulnerable to a Rule 12(b)(6) dismissal, the court must permit a
curative amendment, unless an amendment would be inequitable or futile. See
Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002).
The bankruptcy court should have granted Appellant leave to amend his
adversary complaint to correct his pleading defects. It is not clear that allowing such an
amendment would have been inequitable, and it is not clear that allowing the
amendment would have been futile. 8 In light of the foregoing, the Court concludes that

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To prevail on a claim for damages for violations of Truth in Lending Act, a
plaintiff must bring suit within one year from "the date of the occurrence of the violation."
15 U.S.C. § 1640(e). It may be that the Truth in Lending Act claims are barred by the
applicable statute of limitations. See 15 U.S.C. § 1640; see also Ramadan v. Chase
Manhattan Corp., 156 F.3d 499, 505 (3d Cir. 1998) (Truth in Lending Act's statute of
limitations "is not jurisdictional and is therefore subject to equitable tolling").
8

The allegations of the amended complaint can be difficult to understand. The
amended complaint states a date when a "transfer" to Fannie Mae was completed, and
that Fannie Mae gave false information to the Appellant regarding the name of the
Creditor. Adv. Pro. No. 12-50912(BLS), 0.1. 4, at 1J1J 23, 26. There are specific,
although factually unsupported, allegations of§ 1641(g) violations. /d. at 1J1J 46-50. It is
not clear when Appellant is supposed to have learned of these violations.
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the bankruptcy court erred in dismissing the § 1641 (g) Truth in Lending Act claims
without giving Appellant an opportunity to amend the claims. Therefore, the Court will
vacate the dismissal of Appellant's Truth in Lending Act claims under § 1641 (g) for
consideration of the claims after Appellant has filed an amended complaint as to those
issues.

V. CONCLUSION
For the reasons explained, the motion to dismiss the appeal (D .I. 10) is granted
in part and denied in part, the motion for reconsideration (D .I. 18) is denied, and the
motion to change venue (D. I. 21) is denied. The Court will affirm the bankruptcy court's
dismissal, and denial of the motion for reconsideration, in all respects except in relation
to its acceptance of the facts found by the Superior Court, the impact of those facts on
bankruptcy proofs of claims Nos. 12 and 16, and the Truth in Lending Act claims based
on§ 1641(g). The case is remanded to the bankruptcy court for proceedings consistent
with this Memorandum Opinion.
An order consistent with this opinion will be issued.

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