Kiernozek v. Federal National Mortgage Association et al

Filing 44

MEMORANDUM-DECISION and ORDER - That defendants' 29 motion to dismiss is GRANTED. That Kiernozek's second amended complaint (Dkt. No. 33) is DISMISSED. That the Clerk close this case. Signed by Chief Judge Gary L. Sharpe on 8/24/2015. (jel, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
________________________________
GREGORY KIERNOZEK,
Plaintiff,

1:14-cv-615
(GLS/CFH)

v.
FEDERAL NATIONAL
MORTGAGE ASSOCIATION et al.,
Defendants.
________________________________
APPEARANCES:
OF COUNSEL:
FOR THE PLAINTIFF:
Gregory Kiernozek
Pro Se
28 Beach Avenue
Albany, NY 12203
FOR THE DEFENDANTS:
Bryan, Cave Law Firm
1290 Avenue of the Americas
New York, NY 10104

ANNE T. REDCROSS, ESQ.
SUZANNE M. BERGER, ESQ.
SCOTT H. KAISER, ESQ.

Gary L. Sharpe
Chief Judge
MEMORANDUM-DECISION AND ORDER
I. Introduction
Plaintiff Gregory Kiernozek commenced this action against
defendants Federal National Mortgage Association (“Fannie Mae”) and

Bank of America, seeking monetary and injunctive relief in connection with
allegedly fraudulent practices that occurred during defendants’ foreclosure
of Kiernozek’s home. (See generally 2d Am. Compl., Dkt. No. 33.)
Pending is defendants’ motion to dismiss the second amended complaint
in its entirety.1 (Dkt. No. 29.) For the reasons that follow, the motion is
granted.
II. Background2
On July 22, 2008, Kiernozek took out a loan in the amount of
$198,000 from Countrywide Bank, FSB. (Dkt. No. 29, Attach. 3 at 1.) As
security for that loan, Kiernozek gave a mortgage on certain real property
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Kiernozek originally sought leave to file a second amended complaint by way of
motion on October 24, 2014. (Dkt. No. 22 at 1-2.) Attached to that motion was Kiernozek’s
proposed second amended complaint. (Id. at 3-7.) However, Kiernozek failed to sign that
proposed pleading, and it was never actually filed with the court. (Id. at 7; Dkt. No. 32.)
Defendants filed a motion to dismiss that second amended complaint on November 25, 2014,
(Dkt. No. 29), but, in light of Kiernozek’s later filing of a signed version of his second amended
complaint, (Dkt. No. 33), defendants requested that their motion be considered as seeking to
dismiss the signed second amended complaint, (Dkt. No. 35), and the court granted that
request, (Dkt. No. 36 at 2).
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The facts are drawn from Kiernozek’s second amended complaint and presented in
the light most favorable to him. In addition, the court has considered certain documents
provided to the court by defendants with their motion papers, to the extent they are referenced
and relied upon by Kiernozek in his second amended complaint. See Chambers v. Time
Warner, Inc., 282 F.3d 147, 153-54 (2d Cir. 2002) (explaining that the court, on a motion to
dismiss pursuant to Rule 12(b)(6), may consider documents referred to and relied upon in
drafting the complaint, without converting the motion to one for summary judgment).
Specifically, the court has considered the Trial Period Plan documents sent to Kiernozek by
Bank of America, (Dkt. No. 29, Attach. 6), and the Loan Modification Agreement proposed by
Fannie Mae, (Dkt. No. 29, Attach. 8), both of which are referred to and relied upon by
Kiernozek in his second amended complaint, (2d Am. Compl. ¶¶ 6-7, 9, 12-13).

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to the bank. (Dkt. No. 29, Attach. 4.) The mortgage was later assigned to
Bank of America. (Dkt. No. 29, Attach. 5.) At some point after the
mortgage was issued, Bank of America and/or Fannie Mae offered
Kiernozek a “[h]ome loan modification,” seemingly to prevent foreclosure
on the home. (2d Am. Compl. ¶ 1; Dkt. No. 29, Attach. 6 at 1.) Kiernozek
“was approved for a Fannie Mae trial” payment period, and was initially
responsible for a monthly payment amount of $1,148.33. (2d Am. Compl.
¶¶ 5-6; Dkt. No. 29, Attach. 6 at 1.)
Kiernozek successfully made all payments during this trial period,
but, in March 2013, was offered a permanent loan modification, under
which his monthly mortgage payment would increase to $1,623.58 per
month. (2d Am. Compl. ¶¶ 7-9; Dkt. No. 29, Attach. 8 at 3.) Kiernozek
alleges that this modification was “arbitrary and capricious,” (2d Am.
Compl. ¶ 9), and that both Fannie Mae and Bank of America “have
engaged in unscrupulous lending practices” because “they consistently
came to the negotiating arena with unclean hands,” (id. ¶ 14). Kiernozek
separately alleges that he has suffered from multiple sclerosis since 1997,
and questions whether the modification of his loan terms could have
occurred because of his disability or his “Polish [h]eritage.” (Id. ¶¶ 19-20,
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25.) Kiernozek seeks an order “award[ing] the [h]ome in question to [him]
free and clear of any mortgage payment, clear [d]eed,” (id. ¶ 23), as well as
“$185,000 in past and future damages,” (id. ¶ 26).
III. Standard of Review
The standards of review under Rules 12(b)(1) and 12(b)(6), which
are “substantively identical,” Lerner v. Fleet Bank, N.A., 318 F.3d 113, 128
(2d Cir. 2003), are well settled and will not be repeated. For a full
discussion of those standards, the parties are referred to the court’s
decisions in Unangst v. Evans Law Assocs., P.C., 798 F. Supp. 2d 409,
410 (N.D.N.Y. 2011), and Ellis v. Cohen & Slamowitz, LLP, 701 F. Supp.
2d 215, 218 (N.D.N.Y. 2010), abrogated on other grounds by Altman v.
J.C. Christensen & Assocs., Inc., 786 F.3d 191 (2d Cir. 2015), respectively.
IV. Discussion
Defendants argue that Kiernozek’s second amended complaint
should be dismissed because it fails to state a cognizable claim. (Dkt. No.
29, Attach. 9 at 4-11.) Kiernozek offers no real argument in response, and
instead has simply provided a laundry list of exhibits attached to his
response, while concluding that the documents demonstrate that
defendants “have been negotiating in [b]ad faith.” (Dkt. No. 37 at 1-3.) For
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the following reasons, defendants’ motion is granted.
The gravamen of Kiernozek’s complaint is that the amount of his loan
payment increased after he completed his trial payment period, he was
dissatisfied with the permanent loan modification terms offered, and,
therefore, defendants acted either fraudulently or were possibly
discriminating against him on the basis of his disability and/or ethnicity.
(See generally 2d Am. Compl.) However, his vague and conclusory
allegations are insufficient to withstand defendants’ motion to dismiss. See
ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007)
(“To survive dismissal, the plaintiff must provide the grounds upon which
his claim rests through factual allegations sufficient ‘to raise a right to relief
above the speculative level.’” (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007)); Flemming v. Goord, No. 9:11-CV-1026, 2013 WL
317059, at *4 (N.D.N.Y. Jan. 28, 2013) (holding that the plaintiff’s “vague
and conclusory allegations that multiple [d]efendants have violated [his]
constitutional rights,” which “amount to nothing more than legal
conclusions that . . . are unsupported by any facts,” subjected his
complaint to dismissal). “While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual allegations, a plaintiff’s
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obligation to provide the grounds of his entitle[ment] to relief requires more
than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550 U.S. at 555 (internal quotation
marks and citations omitted). Here, Kiernozek’s allegations do not even
rise to the level of a “formulaic recitation of the elements of a cause of
action,” id., as he simply sets forth vague factual allegations about an
increase in the amount of his monthly mortgage payment. He has provided
almost no factual allegations regarding the circumstances of his increased
payment, and there are no facts alleged to support his conclusion that
defendants were “negotiating in [b]ad faith.” (Dkt. No. 37 at 3.)
As a result, the court is unable to discern the causes of action
Kiernozek seeks to pursue, or the legal bases on which they are premised,
even interpreting his pleading liberally, given his pro se status. Although
he seeks to recover “compensation for past and future suffering caused by
the willful and intentional fraudulent actions” of defendants, Kiernozek
makes no further allegations about the factual basis of his fraud claim. (2d
Am. Compl. ¶ 24.) Such “[c]onclusory allegations and speculation are not
sufficient to plead fraud with particularity,” as is required under both the
Federal Rules and New York law. Nichols v. BAC Home Loans Servicing
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LP, No. 1:13-CV-00224, 2013 WL 5723072, at *8 (N.D.N.Y. Oct. 18, 2013)
(internal quotation marks and citation omitted); see Fed. R. Civ. P. 9(b);
N.Y. C.P.L.R. § 3016(b).
To the extent Kiernozek is attempting to maintain a breach of
contract claim against defendants based on the change to his monthly
payment amount, there appears to be no basis for such a claim, as the trial
payment plan documents in this case expressly account for the possibility
that the monthly payment amount may change. (Dkt. No. 29, Attach. 6 at
3-4.) Whether the trial payment plan constituted a binding contract or
not—and defendants argue that it did not, (Dkt. No. 29, Attach. 9 at 8-9),
an argument that is completely unaddressed in Kiernozek’s response to
the motion—Kiernozek’s allegations that defendants “did offer him a [loan]
modification, just not one he could accept[,] are not sufficient to support a
claim that by entering into a [trial payment plan], [defendants] had
promised [Kiernozek] a modification on particular terms or terms he would
find acceptable.” Lee v. BAC Home Loans Servicing, LP, Civil Action No.
10-12226-GAO, 2013 WL 212615, at *2 (D. Mass. Jan. 18, 2013).
Similarly, Kiernozek makes isolated allegations that defendants’
behavior may have been motivated by his disability or his ethnicity. (2d
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Am. Compl. ¶¶ 19-20, 25.) However, he has not identified any legal
provision under which he asserts such claim(s), and he has completely
failed to allege any facts in support, most notably that he was treated
differently than any other borrower. Kiernozek’s mere questions,
suspicions, and conclusions that his disability or heritage may have
motivated defendants, without any other relevant factual allegations, are
insufficient to state a discrimination claim.3
Although in all cases “[t]he court should freely give leave [to amend]
when justice so requires,” Fed. R. Civ. P. 15(a)(2), “a pro se litigant in
particular should be afforded every reasonable opportunity to demonstrate
that he has a valid claim,” Matima v. Celli, 228 F.3d 68, 81 (2d Cir. 2000)
(internal quotation marks and citations omitted). Specifically, a complaint
filed by a pro se litigant “should not [be] dismiss[ed] without granting leave
to amend at least once when a liberal reading of the complaint gives any

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Lastly, in his pleading, Kiernozek makes passing reference to the “intent and mission”
of the Home Affordable Modification Program (HAMP). (2d Am. Compl. ¶ 11.) However,
Kiernozek has not even alleged that this program applied to him, and, as noted by defendants,
there is no private right of action for borrowers to pursue a claim under HAMP. (Dkt. No. 29,
Attach. 9 at 6-8); see Jordan v. Chase Manhattan Bank, No. 13 Civ. 9015, 2015 WL 1000058,
at *5-6 (S.D.N.Y. Mar. 6, 2015). Again, Kiernozek’s mere displeasure with the ultimate loan
modification terms offered to him is not a basis on which to maintain a cause of action, as
mortgage lenders are under no legal obligation to modify loans. See Fournier v. Bank of Am.
Corp., No. 5:13-CV-00702, 2014 WL 421295, at *7 (N.D.N.Y. Feb. 4, 2014).

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indication that a valid claim might be stated.” Shomo v. City of N.Y., 579
F.3d 176, 183 (2d Cir. 2009) (internal quotation marks and citation
omitted). However, “[o]f course, granting a pro se plaintiff an opportunity to
amend is not required where the plaintiff has already been given a chance
to amend his pleading.” Koehl v. Greene, No. 9:06-CV-0478, 2007 WL
2846905, at *3 (N.D.N.Y. Sept. 26, 2007); see Shuler v. Brown, No. 07-CV0937, 2009 WL 790973, at *5 & n.25 (N.D.N.Y. Mar. 23, 2009).
Here, Kiernozek filed his initial complaint, (Dkt. No. 1), followed by an
amended complaint—apparently as of right—roughly one month later, (Dkt.
No. 7), and then sought, and was granted, leave to file a second amended
complaint, (Dkt. Nos. 22, 26). He has therefore already amended his
complaint twice, and has neither requested nor offered any reason in his
motion response why he should be given leave to amend a third time.
(Dkt. No. 37.) Accordingly, this dismissal of his second amended
complaint is without leave to file a third amended complaint.
V. Conclusion
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that defendants’ motion to dismiss (Dkt. No. 29) is
GRANTED; and it is further
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ORDERED that Kiernozek’s second amended complaint (Dkt. No.
33) is DISMISSED; and it is further
ORDERED that the Clerk close this case; and it is further
ORDERED that the Clerk provide a copy of this MemorandumDecision and Order to the parties.
IT IS SO ORDERED.
August 24, 2015
Albany, New York

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