KOKOSHKA v. BANCO POPULAR

Filing 18

OPINION fld. Signed by Judge Kevin McNulty on 3/17/15. (sr, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

JERRY KOKOSHKA,

Civ. No. 14-cv-4430 (KM)
Plaintiff,
OPINION

V.

BANCO POPULAR NORTH AMERICA,
Defendant.

KEVIN MCNULTY, U.S.D.J.:
Plaintiff Jerry Kokoshka (“Kokoshka”), appearing pro

Se,

brought this

action after the defendant, Banco Popular North America (“Banco Popular”)
denied his application for a home mortgage loan. Presently before the Court is
Banco Popular’s motion to dismiss. For the reasons set forth below, the motion
is granted and the Complaint will be dismissed without prejudice to the
submission of an amended complaint specifying the claims that remain and the
basis for them.
I.

BACKGROUND

On January 29, 2014, Kokoshka, a citizen of New Jersey, executed an
agreement (the “Agreement”) to purchase a condominium in Morristown, New
Jersey for $300,000. Pursuant to that agreement, he deposited $30,000 in
escrow and undertook to obtain a mortgage loan to pay the balance of the sale
price. The Agreement provided that, if Kokoshka was unable to secure a
mortgage and complete the purchase, the seller could keep the deposit.
In March 2014, Kokoshka applied for a $264,000 mortgage loan from
Banco Popular, a New York state charted bank. (See Dkt. No. 1-1, at 46)
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On March 10, 2014, Banco Popular sent Kokoshka a Good Faith
Estimate (“GFE”) of certain terms associated with the mortgage loan should his
application be approved. The GFE projected that the loan would bear an
interest rate of 5.170% for a term of 30 years. (Id.) The GFE also stated that
Kokoshka would incur approximately $8,614 in “settlement charges” in
connection with finalizing and closing the loan. (Id.) These estimated terms
were set to expire on “March 24, 2014 12:00 AM ET,” at which point the rates
and fees would be subject to change. (Id.) Kokoshka had originally planned to
close on the property on March 31, 2014. But because the interest rate quoted
in the GFE was not guaranteed after March 24, 2014, he rescheduled the
closing for that day.
After conducting additional due diligence, Banco Popular denied
Kokoshka’s application. In a letter dated March 18, 2014, Banco Popular set
forth its reasons for denying the loan. It is unclear when Kokoshka actually
received this letter. He claims that the notice was postmarked March 21, 2014,
but did not arrive until the afternoon of March 24, 2014. In any event,
Kokoshka maintains that he did not see the letter until after he was scheduled
to close on the property.
Kokoshka claims that Banco Popular’s denial of his loan application put
his $30,000 deposit in jeopardy. Rather than take the loss, he convinced the
seller that he could quickly raise the funds needed to make a cash purchase.
Kokoshka contributed $143,184 of his own money, and borrowed an additional
$156,816 from his parents. With these funds in place, Kokoshka closed on the
property on April 1, 2014.
On May 30, 2014, Kokoshka commenced this action against Banco
Popular in the Morris County Superior Court. The Complaint includes a
narrative of the above-mentioned events and asserts that Banco Popular
wrongfully denied Kokoshka’s loan application. It does not, however, allege that
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Banco Popular violated any statutes, regulations, or common law
rules. The
relief requested by Kokoshka is equally indeterminate. He conten
ds that he will
have to apply for another mortgage loan on the now-purchased proper
ty in
order to repay his parents. He demands that Banco Popular retra
ct the letter
denying his application so that it will not jeopardize his ability to secure
a loan
from another lender. He next contends that if and when he obtains
this loan,
Banco Popular must reimburse him for the associated settlement
costs, as well
as for the difference between the total amount he would have paid
under the
Banco Popular loan and will pay under this future loan.
Banco Popular removed the action to federal court on July 14, 2014.
Now before the Court is Banco’s Popular’s motion to dismiss for failure
to
state a claim under Fed. R. Civ. P. 12(b)(6).
II.

LEGAL STANDARDS AND DISCUSSION
A. Rule 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6)provides for the dism
issal
of a complaint, in whole or in part, if it fails to state a claim
upon whic

h

relief can be granted. The moving party bears the burden
of showing
that no claim has been stated. Hedges v. United States, 404
F.3d 744,
750 (3d Cir. 2005). For the purposes of a motion to dismiss,
the facts
alleged in the complaint are accepted as true and all reaso
nable
inferences are drawn in favor of the plaintiff. Phillips v. Cou
nty of
Allegheny, 515 F.3d 224, 231. (3d Cir. 2008) (stating that wellestablished “reasonable inferences” principle is not unde
rmined by
subsequent Supreme Court case law). Where the plaintiff
proceeds pro
Se, the court must “liberally construe[
]” the complaint and hold it to
“less stringent standards than formal pleadings drafted
by lawyers.”
Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). But even
“pro se
litigants still must allege sufficient facts in their complain
ts to support a
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claim.” Mala v. Crown Bay Marina, Inc., 704 F.3d
239, 245 (3d Cir.
2013) (citation omitted)
Although a complaint need not contain detailed factu
al allegations, “a
plaintiffs obligation to provide the grounds of his entit
lement to relief requires
more than labels and conclusions.” Bell Ati. Corp. v. Two
mbly, 550 U.S. 544,
555 (2007) (internal quotations omitted). The factual alleg
ations must be
sufficient to raise a plaintiffs right to relief beyond the
merely speculative level
to demonstrate that the claim is “plausible on its face.
” Id. at 570; see also
Umland v. PLANCO Fin. Servs., Inc., 542 F.3d 59, 64
(3d Cir. 2008). This
requires the plaintiff to plead “factual content that allow
s 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) (citing Two
mbly, 550 U.S. at 556).
While this “plausibility standard” does not amount to
a “probability
requirement,” it does ask for “more than a sheer poss
ibility.” Iqbal, 556 U.S. at
678. Stated differently, in reviewing the well-pleaded
factual allegations and
assuming their veracity, this Court must “determine
whether they plausibly
give rise to an entitlement to relief.” Iqbal, 556 U.S.
at 679.
B. Dismissal under Rule 12(b)(6)

As it stands, the Complaint fails to state a specific claim
. It does not
allege that Banco Popular’s conduct in denying his loan
application violated
any laws. As Kokoshka does not assert a single caus
e of action, the Court
cannot determine whether the facts pled in the Com
plaint present a “plausible
claim for relief.” Iqbal, 556 U.S. at 679. Even under
the forgiving analysis
afforded to pro se plaintiffs, then, Kokoshka’s Complain
t would likely be
dismissed under Fed. R. Civ. P. 12(b)(6).
That, however, is not the whole story. In removing the
case, for example,
Banco Popular declared that it was able to discern
a federal cause of action
under the Real Estate Settlement Procedures Act of 1974
, 12 U.S.C. 2601 et

§

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seq. It also appears, however, that the Complaint has
fundamental problems,
some of them potentially jurisdictional. I will there
fore suspend my dismissal
ruling for 30 days, so that plaintiff may exercise one
of three options, stated
below.
C.

Matters to be Addressed in any Amended Com
plaint
I referred in the preceding section to fundamental prob
lems with the
Complaint. One option for dealing with them wou
ld be the filing of an amended
Complaint.
1.

The Recent Loan.

While Banco Popular’s motion to dismiss was pend
ing, Kokoshka
informed the Court that he was “able to secure
a loan at [a] rate not higher
than the one offered by [the] Defendant.” (Dkt. No.
17, at 2) (I will call this the
“Recent Loan.”) In light of this development, he wish
es to withdraw the portion
of his Complaint requesting that Banco Popular resci
nd its denial notice and
reimburse him for the cost difference between the
loans. (Dkt. No. 17, at 2) In
short, Kokoshka sued for damages based on the
loan he anticipated getting,
but the loan he got turned out to be better than he
expected.
It appears from Kokoshka’s papers that he may now
be seeking
reimbursement of the settlement costs he incurred
to close on the Recent Loan.
Those costs, Kokoshka says, total $8,301. These
events, however, had not yet
occurred when he filed his Complaint, and they
do not appear in the
Complaint.
Any amended Complaint must omit any claims that
Kokoshka is no
longer asserting, and must allege exactly what
Kokoshka is now suing for,
based on the Recent Loan.

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2.

Diversity Jurisdiction

Banco Popular removed this case to federal cour
t based, in part, on
diversity jurisdiction. (ECF 1 at
¶f 4-7) See 28 U.S.C. 1332(a) (“The district
courts shall have original jurisdiction of all civil
actions where the matter in
controversy exceeds the sum or value of $75,
000, exclusive of interest and
costs...”) Because the only relief apparently still
requested by Kokoshka is
reimbursement of $8,301, his claim would not surm
ount the $75,000
minimum to permit diversity jurisdiction. The Com
plaint in its present form
would therefore have to be dismissed for lack of juris
diction under Fed. R. Civ.
P. 12(b)(1). See Stephanatos v. Cohen, 2006 WL 2872
519, at *2 (D.N.J. Aug. 7,
2006) (stating that a federal. court may dismiss
a plaintiffs complaint, sua
sponte for lack of subject matter jurisdiction purs
uant to Fed. R. Civ. P.
12(b)(1)).
That, as I have said, is not the whole story. The
Complaint, at least in
some amended form, might set forth a federal ques
tion, making diversity
jurisdiction superfluous (see the following section).
3.

Pleading a Federal Cause of Action

Banco Popular also removed this case to federal
court because its
allegations implicated a federal statute, the Real
Estate Settlement Procedures
Act of 1974 (“RESPA”), 12 U.S.C. 2601 et seq.
(Dkt. No. 1, ¶j 8-11) See
§
generally 28 U.S.C. § 1331 (federal court has juris
diction over complaint that
presents a question of federal law).
As noted above, however, the complaint does not
really specify what law,
state or federal, it is based upon. In his briefs and
unauthorized sur-replies,’
Kokoshka now alleges that Banco Popular has viola
ted several federal statutes,
See L. R .Civ. 7. 1(d)(6) “(No sur-replies are permitted
without permission of the Judge
or Magistrate Judge to whom the case is assigned.”)
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including the RESPA, the Equal Credit Opportun
ity Act, and the Fair Credit
Reporting Act.
Such claims, if properly asserted in a complain
t, might provide the basis
for federal question jurisdiction under 28 U.S.
C. § 1331. But because
Kokoshka raised these allegations in briefs and
sur-replies, I will not consider
them at this time. If Kokoshka intends to seek
relief under these statutes, he
should amend his Complaint and expressly say
so.
III.

GOING FORWARD: PLAINTIFF’S OPTIONS

I present this pro se plaintiff with three options.
Option 1: Do nothing. After 30 days, this dism
issal will become final
and plaintiff may no longer be able to assert
his claims.
Option 2: Confirm lack of federal jurisdiction
within 30 days and
return to state court. Within 30 days, plaintiff
may submit a written
statement to the court, representing that he is
not asserting any federal-law
cause of action, and that he is not seeking dam
ages in excess of $75,000. If so,
I will dismiss the case without prejudice for lack
of federal court jurisdiction,
leaving plaintiff free to pursue whatever state
-law claims he may possess in
state court.
Option 3: File an amended complaint wit
hin 30 days and go forward
in this federal court. Any amended complaint
must do the following:
1.
State the claims and allegations that remain
in the case, omitting
those that have been dropped.

2.
asserted.

State what statutory or common law causes of
action are being

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3.

State the basis for federal court jurisdiction (federal question

and! or diversity) •2

IV.

CONCLUSION
For the reasons stated above, Banco Popular’s motion to dismiss on Rule

12(b)(6) grounds is GRANTED WITHOUT PREJUDICE, but that ruling is
SUSPENDED for 30 days so that plaintiff can exercise one of the options in
section III, above. An appropriate order follows.

KEVIN MCNULTY, U.S.

Date: March 17, 2015

J am conscious that the pro se plaintiff in this removed case never sought a
federal forum in the first place. Nevertheless, if the case is to proceed in this court,
jurisdiction must be shown. The plaintiff may find it helpful to consult the Court’s web
site for information about filing without an attorney and court procedures.
http: / /www.njd.uscourts.gov.
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