Schonfeld v. Wells Fargo Bank, N.A. et al
MEMORANDUM-DECISION AND ORDER granting 31 Motion for Summary Judgment: The Court hereby ORDERS that the Moving Defendants' motion for summary judgment (Dkt. No. 31) is GRANTED; and the Court further ORDERS that the Clerk of the Court shall en ter judgment in Defendants' favor and close this case; and the Court further ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision and Order on all parties in accordance with the Local Rules. Signed by U.S. District Judge Mae A. D'Agostino on 9/27/2017. (Copy served via regular and certified mail)(ban)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
WELLS FARGO BANK, N.A., as trustee for
the Aegis Asset Backed Securities Trust
Mortgage Pass-Through Certificates,
Series 2004-3; AEGIS ASSET BACKED
SECURITIES CORPORATION; and MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS, INC.,
222 Bullock Road
Slingerlands, New York 12159
Plaintiff, pro se
d'ARCAMBAL, OUSLEY LAW FIRM
40 Fulton - Suite 1005
New York, New York 10038
Attorneys for Defendants Wells Fargo Bank,
N.A., as trustee for the Aegis Asset
Backed Securities Trust Mortgage
Pass-Through Certificates, Series 2004-3; and
Mortgage Electronic Registration Systems, Inc.
MICHELLE J. d'ARCAMBAL, ESQ.
DEIRDRE A. CONNOLLY, ESQ.
Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
Pro se Plaintiff David Schonfeld commenced this action on December 1, 2015 against
Wells Fargo Bank, N.A. ("Wells Fargo"), Aegis Asset Backed Securities Corporation ("Aegis"),
and Mortgage Electronic Registration Systems, Inc. ("MERS") (collectively, "Defendants"). See
Dkt. No. 1. Plaintiff alleges causes of action for breach of contract, fraud, and violations of the
Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968. See id.
¶¶ 114-50. On November 21, 2016, Wells Fargo and MERS (the "Moving Defendants") filed a
motion for summary judgment, see Dkt. No. 31, which Plaintiff opposes, see Dkt. No. 33.
Currently before the Court is the Moving Defendants' motion for summary judgment.
On April 20, 2004, Plaintiff executed a promissory note to lender Aegis in the principal
amount of $390,000.00. See Dkt. No. 31-6 ¶ 1; Dkt. No. 31-5 at 23. That same day, Plaintiff
executed a mortgage to secure the note in favor of MERS on property located at 222 Bullock
Road, Slingerlands, New York 12159. See Dkt. No. 31-6 ¶ 2; Dkt. No. 31-5 at 2. The mortgage
indicates that MERS is acting solely as a nominee for the lender and the lender's successors and
assigns. See Dkt. No. 31-5 at 2. The mortgage was recorded in the Albany County Clerk's office
on May 4, 2004. See id. On March 23, 2011, MERS assigned the mortgage to Wells Fargo as
trustee for Aegis Asset Backed Securities Trust Mortgage Pass-Through Certificates, Series 20043. See id. at 29.
According to the Moving Defendants' statement of material facts and to a declaration filed
by the Moving Defendants' attorney, Plaintiff failed to make payments on the mortgage in 2011,
and Wells Fargo commenced a foreclosure action against Plaintiff in state court. See Dkt. No. 316 ¶ 4; Dkt. No. 31-1 ¶ 2. The parties then entered into a loan modification agreement and the
foreclosure action was discontinued. See id.
According to the Moving Defendants' statement of material facts, Plaintiff again defaulted
on the mortgage in or around March of 2014. See Dkt. No. 31-6 ¶ 5. On September 1, 2014,
Select Portfolio Servicing, Inc. ("SPS") became the servicer for the mortgage. See id. ¶ 6; Dkt.
No. 31-5 at 32. From September 2014 to October 2015, SPS sent Plaintiff a number of letters
concerning Plaintiff's default on the mortgage and loan resolution options. See Dkt. No. 31-6 ¶¶
On December 1, 2015, Plaintiff commenced the instant action.1 Plaintiff makes general
allegations throughout the complaint regarding the validity of the mortgage assignment. See Dkt.
No. 1 ¶¶ 49-60, 114-22. Plaintiff also alleges that MERS never possessed or had the authority to
transfer the note, and cannot assign an enforceable mortgage. See id. ¶¶ 66-73. Plaintiff also
asserts various general allegations regarding the legality of MERS as an entity. See id. ¶¶ 85-110.
In Plaintiff's breach of contract cause of action, Plaintiff alleges that Defendants breached
their agreements "by failing to notify Plaintiff of the change in ownership of the Note and
Mortgage, pursuant to the Mortgage." Id. ¶ 118. Plaintiff further alleges that Defendants
breached their agreements by failing to record Wells Fargo's interest in the mortgage in the
county records. See id. ¶¶ 122-28. In Plaintiff's cause of action for fraud, Plaintiff alleges that
Defendants "were more than well aware that the statement and non-recorded Assignment were
beyond false." Id. ¶ 132. Plaintiff makes several other general and vague allegations, including
that "Defendants were lying intentionally in order to induce plaintiff to do what they wanted." Id.
¶ 133. In Plaintiff's final cause of action for RICO violations, Plaintiff again asserts vague
allegations, including that Wells Fargo "consummated, collaborated, and executed serious [sic] of
frauds, theft, and felonious crimes that infringed on Plaintiff." Id. ¶ 146. Plaintiff requests
The Moving Defendants suspect that, instead of attempting to submit another loan
modification application to Wells Fargo, Plaintiff was approached by a business called Andersen
Forensics, which is a company that purportedly helps people repair bad credit. See Dkt. No. 31-3
at 8 n.2; see also Dkt. No. 20.
damages in the amount of $390,000.00 for breach of contract, $250,000.00 for fraud, and
$500,000.00 for RICO violations. See id. at 17.
The Moving Defendants argue that Plaintiff's breach of contract claim is unsupported.
They point to language in the mortgage that permits an assignment of the note and mortgage
without notice to Plaintiff. See Dkt. No. 31-3 at 10. They also argue that Plaintiff cannot
establish a breach of contract claim based on the splitting of the note and mortgage. See id. at 11.
With respect to Plaintiff's fraud claim, the Moving Defendants argue that Plaintiff's broad
allegations fail to identify any particular false statement allegedly made by Defendants. See id. at
13-14. With respect to Plaintiff's RICO claims, the Moving Defendants contend that Plaintiff
cannot demonstrate a "pattern of racketeering activity," which is necessary to sustain a RICO
claim. See id. at 14-15. The Moving Defendants further argue that Plaintiff does not have
standing to bring claims against MERS, and that even if Plaintiff did have standing, Plaintiff's
claims regarding MERS's assignment of the mortgage are without merit. See id. at 16-19.
In Plaintiff's opposition, he repeatedly articulates the summary judgment standard and
argues that questions of fact preclude summary judgment, although he does not specifically
identify any particular facts that are in dispute. See Dkt. No. 33 at 1-7. Plaintiff further argues
that discovery is incomplete. See id. at 7-9. Plaintiff also relies on a case from the New York
Supreme Court, Appellate Division, First Department that dealt with whether a party to a contract
to render services could be liable in tort to third persons. See id. at 6 (citing Rahim v. Sottile Sec.
Co., 32 A.D.3d 77, 80 (1st Dep't 2006)).
Standard of Review
A court may grant a motion for summary judgment only if it determines that there is no
genuine issue of material fact to be tried and that the facts as to which there is no such issue
warrant judgment for the movant as a matter of law. See Chambers v. TRM Copy Ctrs. Corp., 43
F.3d 29, 36 (2d Cir. 1994) (citations omitted). When analyzing a summary judgment motion, the
court "'cannot try issues of fact; it can only determine whether there are issues to be tried.'" Id. at
36-37 (quotation and other citation omitted). Moreover, it is well-settled that a party opposing a
motion for summary judgment may not simply rely on the assertions in its pleading. See Celotex
Corp. v. Catrett, 477 U.S. 317, 324 (1986) (quoting Fed. R. Civ. P. 56(c), (e)).
In assessing the record to determine whether any such issues of material fact exist, the
court is required to resolve all ambiguities and draw all reasonable inferences in favor of the
nonmoving party. See Chambers, 43 F.3d at 36 (citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986)) (other citations omitted). Where the non-movant either does not respond to the
motion or fails to dispute the movant's statement of material facts, the court may not rely solely
on the moving party's Rule 56.1 statement; rather, the court must be satisfied that the citations to
evidence in the record support the movant's assertions. See Giannullo v. City of N.Y., 322 F.3d
139, 143 n.5 (2d Cir. 2003) (holding that not verifying in the record the assertions in the motion
for summary judgment "would derogate the truth-finding functions of the judicial process by
substituting convenience for facts").
"It is well established that a court is ordinarily obligated to afford a special solicitude to
pro se litigants." Tracy v. Freshwater, 623 F.3d 90, 101 (2d Cir. 2010) (citations omitted).
"[C]ourts must construe pro se pleadings broadly, and interpret them 'to raise the strongest
arguments that they suggest.'" Cruz v. Gomez, 202 F.3d 593, 597 (2d Cir. 2000) (quoting
Graham v. Henderson, 89 F.3d 75, 79 (2d Cir. 1996)). "Courts 'are less demanding of [pro se]
litigants generally, particularly where motions for summary judgment are concerned.'" Sec. &
Exch. Comm'n v. Penn, 225 F. Supp. 3d 225, 233 (S.D.N.Y. 2016) (quoting Jackson v. Fed.
Express, 766 F.3d 189, 195 (2d Cir. 2014)). "This lower standard for pro se litigants does not,
however, 'relieve [the pro se litigant] of his duty to meet the requirements necessary to defeat a
motion for summary judgment.'" Id. (quoting Jorgensen v. Epic/Sony Records, 351 F.3d 46, 50
(2d Cir. 2003)).
Background of MERS
Plaintiff makes a number of allegations about MERS and its recording system. See Dkt.
No. 1 ¶¶ 85-110. Plaintiff claims that "MERS is simply an 'artificial' entity designed to
circumvent certain law and other legal requirements dealing with mortgage loans." Id. ¶ 88.
Plaintiff alleges that "[i]n the present case, because no recorded assignment of the Mortgage
occurred while the ownership changed, a nullity has occurred. The Mortgage is legally
unenforceable by MERS and its successors in interest." Id. ¶ 90. Plaintiff further alleges that
"MERS never acquires actual physical possession of the mortgage Note, nor do they acquire any
beneficial interest in the Note." Id. ¶ 92.
The New York Court of Appeals has provided the following useful background
information regarding MERS:
In 1993, the MERS system was created by several large participants
in the real estate mortgage industry to track ownership interest in
residential mortgages. Mortgage lenders and other entities, known
as MERS members, subscribe to the MERS system and pay annual
fees for the electronic processing and tracking of ownership and
transfers of mortgages. Members contractually agree to appoint
MERS to act as their common agent on all mortgages they register
in the MERS system.
The initial MERS mortgage is recorded in the County Clerk's office
with "Mortgage Electronic Registration Systems, Inc." named as the
lender's nominee or mortgagee of record on the instrument. During
the lifetime of the mortgage, the beneficial ownership interest or
servicing rights may be transferred among MERS members (MERS
assignments), but these assignments are not publicly recorded;
instead they are tracked electronically in MERS's private system.
In the MERS system, the mortgagor is notified of transfers of
servicing rights pursuant to the Truth in Lending Act, but not
necessarily of assignments of the beneficial interest in the
Knox v. Countrywide Bank, 4 F. Supp. 3d 499, 505 (E.D.N.Y. 2014) (quoting MERSCORP, Inc. v.
Romaine, 8 N.Y.3d 90, 96 (2006)) (footnotes omitted). Generally, "courts have upheld the MERS
system against broad challenges, although the Second Department in New York has held that the
splitting of the note from the mortgage affects which entities have standing to foreclose." Id.
(citing Bank of New York v. Silverberg, 86 A.D.3d 274 (2d Dep't 2011)).2 Courts have held that
the "splitting" of the note and mortgage does not invalidate those instruments. See id. at 508. "It
is thus clear under New York law that the recording and transferring of mortgages through MERS
is a proper and acceptable method for doing so." Dimaria v. Accredited Home Lenders, Inc., No.
14-CV-6292, 2016 WL 4033164, *2 (E.D.N.Y. July 27, 2016).
Breach of Contract
"Under New York law, 'an action for breach of contract requires proof of (1) a contract;
(2) performance of the contract by one party; (3) breach by the other party; and (4) damages.'"
First Inv'rs Corp. v. Liberty Mut. Ins. Co., 152 F.3d 162, 168 (2d Cir. 1998) (quoting Rexnord
Holdings, Inc. v. Bidermann, 21 F.3d 522, 525 (2d Cir. 1994)). "Summary judgment is
appropriate if the terms of the contract are unambiguous." Fischer & Mandell, LLP v. Citibank,
N.A., 632 F.3d 793, 799 (2d Cir. 2011) (citation omitted).
In Silverberg, the Second Department held that an assignee of MERS did not have
standing to commence a foreclosure action where MERS was listed in the mortgage instruments
as nominee and mortgagee for the purposes of recording but was never the holder or assignee of
the underlying note. See Silverberg, 86 A.D.3d at 283.
Plaintiff alleges that Defendants "breached their agreement with Plaintiff . . . by failing to
notify Plaintiff of the change in ownership of the Note and Mortgage, pursuant to the Mortgage."
Dkt. No. 1 ¶ 118. Plaintiff believes that this failure to notify him voids the mortgage and the note.
See id. ¶ 53. However, the mortgage states that "[t]he Note, or an interest in the Note, together
with this Security Instrument, may be sold one or more times. I might not receive any prior
notice of these sales." Dkt. No. 31-3 at 10; Dkt. No. 31-5 at 16. Accordingly, Plaintiff cannot
establish a breach of contract claim on that ground. See Santana v. Fed. Nat'l Mortg. Ass'n, No.
1:15-CV-1424, 2016 WL 3149731, *3 (N.D.N.Y. June 3, 2016) ("Plaintiff cannot claim that
Defendants breached the mortgage by failing to give him notice of a change in ownership of the
note and mortgage when the mortgage does not require such notice."); Zap v. Mortg. Elec.
Registration Sys., Inc., No. 6:15-cv-00624, 2016 WL 6471229, *5 (N.D.N.Y. Nov. 1, 2016)
("Since the mortgage itself states that the mortgage and note may be sold without notice to the
mortgagor, MERS did not breach the mortgage agreement by failing to notify Plaintiff of the
transfer of these instruments.").
Plaintiff also asserts various vague allegations regarding Wells Fargo's failure to record its
interest in the mortgage. See id. ¶¶ 122-28. Plaintiff alleges that "while the Mortgage indicates
the Note and Mortgage may be sold, it therein states that the Mortgage and Note would be
transferred together. No assignment of the Mortgage is recorded in the county records to reflect
the transfer of Plaintiff's Loan to [Wells Fargo]." Dkt. No. 1 ¶ 122. The plaintiff in Santana
made a very similar argument, and the court held that "[w]hether the Mortgage was split from the
Note is inconsequential for the purposes of analyzing a claim for breach of contract. '[S]plit
mortgages may invalidate the standing of the purported mortgagee but they do not invalidate the
existence of a lien on validly secured property.'" Santana, 2016 WL 3149731, at *3 (quoting
Caraballo v. Homecomings Fin., No. 12 Civ. 3127, 2014 WL 2117225, *3 (S.D.N.Y. May 21,
2014)). Accordingly, Plaintiff has failed to establish a breach of contract claim on that ground as
Liberally construed, the complaint also appears to allege a breach of the implied covenant
of good faith and fair dealing. See Dkt. No. 1 ¶ 118. At the outset, "New York law 'does not
recognize a separate cause of action for breach of the implied covenant of good faith and fair
dealing when a breach of contract claim, based on the same facts, is also pled.'" Palmer Kane
LLC v. Scholastic Corp., No. 12 Civ. 3890, 2014 WL 1303135, *6 (S.D.N.Y. Mar. 31, 2014)
(quoting Harris v. Provident Life & Accident Ins. Co., 310 F.3d 73, 81 (2d Cir. 2002)). Here,
Plaintiff's allegations with respect to his purported claim for breach of the covenant of good faith
and fair dealing are based on the same facts that give rise to his breach of contract claim—namely
that Defendants failed to notify Plaintiff of the change in ownership of the mortgage. See Dkt.
No. 1 ¶ 118.
Despite the existence of a contract, a plaintiff may still succeed on a claim for breach of
the implied covenant of good faith and fair dealing if he can "establish a legal duty separate and
apart from contractual duties." Washington v. Kellwood Co., No. 05 Civ. 10034, 2009 WL
855652, *6 (S.D.N.Y. Mar. 24, 2009). To establish a claim for breach of the implied covenant of
good faith and fair dealing, a plaintiff must establish the following: "(1) defendant must owe
plaintiff a duty to act in good faith and conduct fair dealing; (2) defendant must breach that duty;
and (3) the breach of duty must proximately cause plaintiff's damages." Id. (citation omitted).
Here, Plaintiff has failed to identify in his complaint or in his opposition brief any separate duties
owed to him or how Defendants breached any such duty. Again, Plaintiff's allegations stem from
Defendants' failure to notify him of the change in ownership of the mortgage, but the mortgage
explicitly allows for such an assignment.
Accordingly, the Moving Defendants' are entitled to summary judgment on Plaintiff's
breach of contract claim.
"A claim for fraud under New York law requires ' a material misrepresentation of a
fact,  knowledge of its falsity,  an intent to induce reliance,  justifiable reliance by the
plaintiff and  damages.'" LBBW Luxemburg S.A. v. Wells Fargo Sec. LLC, 10 F. Supp. 3d 504,
514 (S.D.N.Y. 2014) (quoting Landesbank Baden–Wurttemberg v. Goldman, Sachs & Co., 478
Fed. Appx. 679, 681 (2d Cir. 2012)). A party alleging fraud "must state with particularity the
circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). "[T]he complaint must: (1)
specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3)
state where and when the statements were made, and (4) explain why the statements were
fraudulent." Acito v. IMCERA Grp., Inc., 47 F.3d 47, 51 (2d Cir. 1995) (quoting Mills v. Polar
Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993)).
Plaintiff has failed to particularly identify any alleged fraudulent statements. In his
complaint, Plaintiff states that "Defendants were more than well aware that the statement and
non-recorded Assignment were beyond false." Dkt. No. 1 ¶ 132. Plaintiff then states that
"Defendants were lying intentionally in order to induce plaintiff to do what they wanted," id. ¶
133, and that "Plaintiff did not know that the Defendants' statement was a lie," id. ¶ 134. Plaintiff
further submits that he was harmed in the amount of $250,000.00, but provides no explanation as
to how he calculated this amount. See id. ¶ 135.
The plaintiff in Santana brought very similar allegations of fraud, and the court held that
Plaintiff's allegations could not survive a motion to dismiss. See Santana, 2016 WL 3149731, at
*4. The court stated the following:
Plaintiff does not identify a particular statement that was false, but
instead contends that he had a false belief about ownership of the
mortgage and implies that Defendants should have known of that
belief. That allegation does not identify the particular statement,
the identity of the speaker, or the time and place where the
allegedly fraudulent statement was made. In that sense, the
allegation falls short of the requirements outlined above. Moreover,
the Complaint also fails to explain why the statements were
fraudulent, or to what action the statements induced him. Plaintiff
also fails to offer any explanation of how the fraud damaged him;
he just offers an amount of damages.
Id. Similarly, here, Plaintiff does not allege any specific misrepresentation, and offers no
explanation as to how he arrived at his damages calculation. Plaintiff's opposition brief also fails
to identify any specific misrepresentation. Plaintiff has certainly failed to point to any evidence
in the record establishing that Defendants made a material misrepresentation, how any specific
statements were fraudulent, or that Defendants had an intent to induce reliance.
Also, like in Santana, Plaintiff's fraud claim appears to be based on the same facts that his
breach of contract claim is based on. Plaintiff's fraud allegations stem from Defendants' failure to
notify Plaintiff of the change in ownership of the mortgage and from Wells Fargo's failure to
record its interest in the mortgage. See Dkt. No. 1 ¶ 132. Likewise, Plaintiff argues that
Defendants breached their agreements with Plaintiff by failing to notify him of the change in
ownership of the note and mortgage and by failing to record the transfer of the mortgage in the
county records. See id. ¶¶ 118-28. "In New York, '[i]t is well settled that a cause of action for
fraud does not arise where, as here, the fraud alleged relates to a breach of contract.'" Santana,
2016 WL 3149731, at *4 (quoting Salvador v. Uncle Sam's Auctions & Realty, Inc., 307 A.D.
609, 611 (3d Dep't 2003)); see also Gander Mountain Co. v. Islip U-Slip LLC, 923 F. Supp. 2d
351, 366 (N.D.N.Y. 2013) ("Where a plaintiff pleads both a fraud claim and a breach of contract
claim, the plaintiff must distinguish the two by (1) demonstrating a legal duty separate from the
duty to perform under the contract, (2) demonstrating a fraudulent misrepresentation collateral or
extraneous to the contract, or (3) seeking special damages caused by the misrepresentation and
unrecoverable as contract damages."). Plaintiff fails to adequately distinguish the two causes of
Accordingly, the Moving Defendants' motion for summary judgment on Plaintiff's fraud
claim is granted.
"To establish a RICO claim, a plaintiff must show: '(1) a violation of the RICO statute, 18
U.S.C. § 1962; (2) an injury to business or property; and (3) that the injury was caused by the
violation of Section 1962.'" DeFalco v. Bernas, 244 F.3d 286, 305 (2d Cir. 2001) (quoting
Pinnacle Consultants, Ltd. v. Leucadia Nat'l Corp., 101 F.3d 900, 904 (2d Cir. 1996)). "To
establish a substantive RICO violation, a plaintiff must show a 'pattern of racketeering activity,'
18 U.S.C. § 1962(a)-(c), and to establish a RICO conspiracy, a plaintiff must show a conspiracy
to commit a substantive RICO violation, id. § 1962(d)." Spool v. World Child Int'l Adoption
Agency, 520 F.3d 178, 183 (2d Cir. 2008). Accordingly, "[u]nder any prong of § 1962, a plaintiff
in a civil RICO suit must establish a 'pattern of racketeering activity.'" Id. (quotation omitted).
According to 18 U.S.C. § 1961, a "'pattern of racketeering activity' requires at least two
acts of racketeering activity, . . . the last of which occurred within ten years . . . after the
commission of a prior act of racketeering activity." 18 U.S.C. § 1961(5). "The acts of
racketeering activity that constitute the pattern must be among the various criminal offenses listed
in § 1961(1), and they must be 'related, and [either] amount to or pose a threat of continuing
criminal activity.'" Spool, 520 F.3d at 183 (quoting Cofacrèdit, S.A. v. Windsor Plumbing Supply
Co., 187 F.3d 229, 242 (2d Cir. 1999)).
In the present matter, Plaintiff asserts vague allegations regarding Defendants' purported
RICO violations. As mentioned above, Plaintiff alleges that Wells Fargo "consummated,
collaborated, and executed serious [sic] of frauds, theft, and felonious crimes that infringed on
Plaintiff." Dkt. No. 1 ¶ 146. Plaintiff also alleges that "[t]he multiple Ponzi schemes within and
surrounding the 'Securitization Scheme' is in fact a public ill." Id. ¶ 145. Even liberally
construing Plaintiff's submissions, Plaintiff fails to establish that Defendants committed any of the
predicate offenses in 18 U.S.C. § 1961(1). Plaintiff makes vague allegations of fraud throughout
his complaint, and several of the predicate offenses relate to fraud in various contexts. See 18
U.S.C. § 1961(1). However, "all allegations of fraudulent predicate acts are subject to the
heightened pleading requirements of Federal Rule of Civil Procedure 9(b)." First Capital Asset
Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159, 178 (2d Cir. 2004) (citation omitted). Not only has
Plaintiff failed to identify with particularity any fraudulent acts, but Plaintiff certainly cannot
point to any evidence in the record establishing that Defendants committed any of the predicate
offenses relating to fraud. With respect to Plaintiff's conclusory allegation that Wells Fargo
engaged in some kind of "theft," see Dkt. No. 1 ¶ 146, Plaintiff fails to provide any specific facts
or identify any evidence in the record establishing this purported "theft." In any event,
"[o]rdinary theft offenses and conspiracies to commit them are not among the predicate activities
defined in 18 U.S.C. § 1961(1)." Spool, 520 F.3d at 184.
Since Plaintiff has failed to establish a predicate act of racketeering activity, Plaintiff has
also failed to establish a "pattern" of racketeering activity. See Katzman v. Victoria's Secret
Catalogue, 167 F.R.D. 649, 656 (S.D.N.Y. 1996) ("In the absence of a predicate racketeering act,
no 'pattern' of racketeering activity can exist."). Moreover, even if Plaintiff had established a
number of predicate acts, given that this case involves only a single mortgage loan, Plaintiff has
still failed to establish a pattern of racketeering activity. See Ciuffetelli v. Apple Bank For Sav.,
208 F.3d 202, 202 (2d Cir. 2000) ("[T]he alleged scheme in this case—defendants' attempt to
deprive plaintiffs of their mortgaged property—involves a single mortgage loan which was paid
in full on January 1998. We conclude that these circumstances do not establish a pattern of
racketeering activity under the RICO statute.") (citing Mead v. Schaub, 757 F. Supp. 319, 323
(S.D.N.Y. 1991)) ("To the extent that the goal of the alleged scheme in this case was to deprive
[plaintiff] of his client bases, each alleged act constitutes nothing more than a step towards its
accomplishment. Although the alleged scheme to defraud [plaintiff] may have required a number
of steps over a determinate period of time, nevertheless because of its terminable nature and
single goal it does not meet the requirement of continuity.").
Finally, Plaintiff argues that his RICO conspiracy claim should survive the instant motion
even if he fails to establish an underlying violation or a pattern of racketeering activity. See Dkt.
No. 1 ¶ 145. However, since Plaintiff has failed to establish a substantive RICO violation, his
conspiracy claim also fails. See Allen v. New World Coffee, Inc., No. 00 CIV. 2610, 2002 WL
432685, *6 (S.D.N.Y. Mar. 19, 2002) ("The dismissal of all of plaintiffs' RICO claims leaves the
conspiracy cause of action without a leg to stand on. 'Any claim under § 1962(d) based on
conspiracy to violate the other subsections of section 1962 must fail if the substantive claims are
themselves deficient.'") (quoting Discon, Inc. v. NYNEX Corp., 93 F.3d 1055, 1064 (2d Cir.
1996)), rev'd on other grounds, 525 U.S. 128 (1998).
Accordingly, the Moving Defendants' motion for summary judgment seeking dismissal of
Plaintiff's RICO claims is granted.
Defendant Aegis is named in the mortgage and the note as the lender. See Dkt. No. 31-5
at 2, 23. No attorney has appeared on behalf of Aegis. The Moving Defendants' attorney filed a
notice of appearance only on behalf of Wells Fargo and MERS. See Dkt. No. 13. Aegis never
filed an answer or any other pleadings or motions in this case.
With that said, the claims against the Moving Defendants are very similar to the claims
against Aegis and arise from the exact same facts. Although Plaintiff does assert some claims
specific to Wells Fargo and MERS, most of the arguments the Moving Defendants make also
pertain to Aegis. Plaintiff has not established a claim for breach of contract, fraud, or for a RICO
violation against Aegis for all the reasons discussed above with respect to the Moving
Defendants.3 Accordingly, Plaintiff's complaint as against Aegis is also dismissed. See
Barbagallo v. Cty. of Westchester, No. 03 CV 7480, 2005 WL 3434425, *3 (S.D.N.Y. Dec. 13,
2005) ("Inexplicably, the other Defendants did not move for summary judgment or dismissal.
The . . . claims against them are similar to, or derivative from, the claims presented against the
movants. Therefore, they also are dismissed.").
After carefully reviewing the entire record in this matter, the parties' submissions and the
applicable law, and for the above-stated reasons, the Court hereby
It is also clear that in Plaintiff's opposition brief, he believed that he was responding to a
motion for summary judgment filed by "all" Defendants. See Dkt. No. 33 at 1.
ORDERS that the Moving Defendants' motion for summary judgment (Dkt. No. 31) is
GRANTED;4 and the Court further
ORDERS that the Clerk of the Court shall enter judgment in Defendants' favor and close
this case; and the Court further
ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision
and Order on all parties in accordance with the Local Rules.
IT IS SO ORDERED.
Dated: September 27, 2017
Albany, New York
In rendering this decision, the Court is not making any rulings with respect to which
entity or entities have standing to commence a foreclosure action. The Court is merely deciding
that, based on all of Plaintiff's submissions and pleadings, even liberally construed, Defendants
are entitled to summary judgment on the claims that Plaintiff brought in this action. Although a
foreclosure action was commenced in 2011, see Dkt. No. 31-6 ¶ 4, that action was discontinued
and the Court has no knowledge regarding any potential ongoing foreclosure proceedings.
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