Pierce v. Homecomings Financial, LLC et al
ORDER adopting 24 Report and Recommendations in its entirety. ORDERED that the Complaint (Dkt. No. 1 ) and proposed Amended Complaint (Dkt. No. 28 ) are dismissed without prejudice. ORDERED that Plaintiff's motion for a TRO (Dkt. No. 11 ) and motion for judicial review (Dkt. No. 23 ) are denied as moot. ORDERED that all of the pending motions to dismiss (Dkt. Nos. 14 , 32 , 35 ) are denied as moot. ORDERED that if Plaintiff fails to file a proposed amended complaint demonstrating this Court's jurisdiction within thirty (30) days of the date of this Order, the Clerk is directed to close this case. Signed by Judge Brenda K. Sannes on 12/4/17. (Copy served on plaintiff via regular and certified mail)(rjb, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
HOMECOMINGS FINANCIAL, LLC;
RESIDENTIAL FUNDING COMPANY, LLC;
RESIDENTIAL ACCREDIT LOANS, INC.;
DEUTSCHE BANK TRUSTCOMPANY
AMERICAS, as Trustee for Securitized Trust Rali-Series
2007-QS4 Trust; MORTGAGE ELECTRONIC
REGISTRATION SYSTEM (“MERS”); and
JOHN DOES 1 THROUGH 100 INCLUSIVE, et al.,
Harriet Pierce, Plaintiff Pro se
Saratoga Springs, New York
Patrick G. Broderick
Greenberg Traurig, LLP
200 Park Avenue, 39th Floor
New York, New York 10166
For Defendant Deutsche Bank Trust Company Americas
as Trustee for Securitized Trust Rali-Series 2007-QS4
Jantra Van Roy
Zeichner Ellman & Krause LLP
1211 Avenue of the Americas
New York, New York 10036
For Defendants Residential Funding Company, LLC,
Homecomings Financial LLC, and Residential Accredit Loans, Inc.
Hon. Brenda K. Sannes, United States District Judge:
MEMORANDUM-DECISION AND ORDER
On August 11, 2017, Plaintiff pro se Harriet Pierce filed a Complaint challenging a
foreclosure proceeding involving her real property located at 138 Jefferson Street, Saratoga
Springs, New York. (Dkt. No. 1). Plaintiff also filed a motion for leave to proceed in forma
pauperis (“IFP”). (Dkt. No. 4). On August 28, 2017, Plaintiff filed a motion for a temporary
restraining order (“TRO”) seeking to prevent Defendants from selling her home or subjecting her
to eviction. (Dkt. No. 11). On August 30, 2017, the Court issued an Order setting response and
reply deadlines with respect to the motion for a TRO and noting that the Complaint failed to
allege federal question or diversity jurisdiction. (Dkt. No. 12). The Court therefore ordered the
parties to address the issue of subject matter jurisdiction. (Id. at 2). On September 28, 2017,
Defendant Deutsche Bank Trust Company Americas, as Trustee for Securitized Trust Rali-Series
2007-QS4 Trust (“Deutsche Bank”), filed a motion to dismiss the Complaint under Rule
12(b)(1)-(3) and (6) and a response in opposition to Plaintiff’s motion for a TRO. (Dkt. Nos. 14,
15). On October 23, 2017, Plaintiff filed a “Demand for Judicial Review.” (Dkt. No. 23).
In a Report-Recommendation and Order entered on October 25, 2017, United States
Magistrate Judge Christian F. Hummel granted Plaintiff’s request to proceed IFP but
recommended that the Complaint be dismissed with leave to amend “to the extent plaintiff may
be able to demonstrate this Court’s diversity jurisdiction or federal question jurisdiction.” (Dkt.
No. 24, at 8). Magistrate Judge Hummel advised Plaintiff that under 28 U.S.C. § 636(b)(1), she
had fourteen days within which to file written objections to the report and that the failure to
object to the report within fourteen days would preclude appellate review. (Id.). On November
8, 2017, Plaintiff filed objections to the Report-Recommendation (Dkt. No. 27) and a proposed 1
Amended Complaint (Dkt. No. 28). Deutsche Bank and Defendant Mortgage Electronic
Registration System (“MERS”) subsequently filed motions to dismiss the Amended Complaint
under Rule 12(b)(1)-(2) and (6). (Dkt. Nos. 32, 35).
For the reasons that follow, the Court adopts the Report-Recommendation and Order and
dismisses the Complaint for failure to allege subject matter jurisdiction; concludes that the
proposed Amended Complaint fails to allege a federal claim or diversity jurisdiction; and denies
Plaintiff’s motions for a TRO and judicial review and Deutsche Bank’s motions to dismiss as
Standard of Review
Objections to Report-Recommendation
Plaintiff objects to the Magistrate Judge’s conclusion that the Complaint fails to allege
federal question or diversity jurisdiction. (Dkt. No. 27). Plaintiff also objects to the Magistrate
Judge’s exercise of authority in this case as well as his failure to address Deutsche Bank’s
motion to dismiss. This Court reviews de novo those portions of the Magistrate Judge’s findings
and recommendations that have been properly preserved with a specific objection. Petersen v.
Astrue, 2 F. Supp. 3d 223, 228–29 (N.D.N.Y. 2012); 28 U.S.C. § 636(b)(1)(C). “A proper
objection is one that identifies the specific portions of the [Report and Recommendation] that the
objector asserts are erroneous and provides a basis for this assertion.” Kruger v. Virgin Atl.
Airways, Ltd., 976 F. Supp. 2d 290, 296 (E.D.N.Y. 2013) (quoting DuBois v. Macy’s Retail
Holdings, Inc., 11-cv-4904, 2012 WL 4060586, at *1, 2012 U.S. Dist. LEXIS 131678, at *3
As the Amended Complaint was filed more than 21 days after service of Deutsche Bank’s Rule 12(b) motion,
Plaintiff may amend her pleading “only with the opposing party’s written consent or the court’s leave.” Fed. R. Civ.
P. 15(a)(1)(B). Accordingly, the Court construes Plaintiff’s submission as a motion to amend the complaint.
(E.D.N.Y. Sept. 13, 2012)). Properly raised objections must be “specific and clearly aimed at
particular findings” in the Report. Molefe v. KLM Royal Dutch Airlines, 602 F. Supp. 2d 485,
487 (S.D.N.Y. 2009). Findings and recommendations as to which there was no properly
preserved objection are reviewed for clear error. Id. “To the extent . . . that the party makes only
conclusory or general arguments . . . the Court will review the Report strictly for clear error.”
DiPilato v. 7-Eleven, Inc., 662 F. Supp. 2d 333, 339 (S.D.N.Y. 2009).
Motion to Amend
As noted, following the Report-Recommendation, Plaintiff filed a proposed Amended
Complaint, which the Court considers together with her objections. In general, leave to amend
should be freely given “when justice so requires.” Fed. R. Civ. P. 15(a)(2). See Dougherty v.
Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002) (“An amendment
to a pleading will be futile if a proposed claim could not withstand a motion to dismiss pursuant
to Rule 12(b)(6).”). To survive a motion to dismiss, “a complaint must provide ‘enough facts to
state a claim to relief that is plausible on its face.’” Mayor & City Council of Balt. v. Citigroup,
Inc., 709 F.3d 129, 135 (2d Cir. 2013) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). Since Plaintiff is proceeding pro se, the Court must also liberally construe the proposed
Amended Complaint in her favor. Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009).
Federal Question Jurisdiction
Plaintiff objects to Magistrate Judge Hummel’s conclusion that the Complaint failed to
allege a basis for federal question jurisdiction, arguing that the Court has jurisdiction “to issue
injunctive relief” under Section 1964(c) of the Racketeer Influenced and Corrupt Organizations
Act (“RICO”), 18 U.S.C. § 1964(c). (Dkt. No. 27, at 6). On de novo review, the Court finds that
Magistrate Judge Hummel properly concluded that the Complaint, which contains no reference
to the civil RICO statute, or any language that could be construed as alleging a RICO claim,
contained no federal question.
Further, the proposed Amended Complaint, fails to advance allegations stating a
plausible RICO claim. 2 The RICO statute, 18 U.S.C. § 1962(c), makes it “unlawful for any
person employed by or associated with any enterprise . . . to conduct or participate in the conduct
of such enterprise’s affairs through a pattern of racketeering activity.” To state a claim under
§ 1962(c), “a plaintiff must allege (1) conduct, (2) of an enterprise, (3) through a pattern (4) of
racketeering activity, as well as injury to business or property as a result of the RICO violation.”
Lundy v. Catholic Health Sys. of Long Island Inc., 711 F.3d 106, 119 (2d Cir. 2013) (internal
quotations and citation omitted). “Racketeering activity consists of the commission of a
predicate act.” Aronov v. Mersini, No. 14-CV-7998 PKC, 2015 WL 1780164, at *3, 2015 U.S.
Dist. LEXIS 51695, at *7 (S.D.N.Y. Apr. 20, 2015). The RICO statute sets forth a list of acts
that qualify as racketeering activity and includes “any act which is indictable under [inter
alia] . . . [18 U.S.C] section 1341 (relating to mail fraud), 1343 (relating to wire fraud), section
1344 (relating to financial institution fraud).” 18 U.S.C. § 1961(1)(B); see Beck v. Prupis, 529
U.S. 494, 497 n.2 (2000) (“Section 1961(1) contains an exhaustive list of acts of ‘racketeering,’
commonly referred to as ‘predicate acts.’”).
To the extent the Amended Complaint may be read to allege that Defendants formed an
enterprise for the purpose of fraudulently depriving her of her real property, it fails to adequately
plead commission of a predicate act. Though it alleges fraudulent conduct, the Amended
The Local Rules of the Northern District of New York require that when a civil RICO claim is asserted before this
Court, “the party asserting such a claim shall file a RICO statement within (30) days of the filing of the pleading
containing such a claim.” N.D.N.Y.L.R. 9.2. Plaintiff commenced this action on August 11, 2017, but has failed to
file a RICO statement. Therefore, Plaintiff’s RICO claim may be dismissed for this reason alone. See Amaker v.
Kelley, No. 01 Civ. 877, 2009 WL 385413, at *11, 2008 U.S. Dist. LEXIS 123604, at *34 (N.D.N.Y. Feb. 9, 2009),
aff’d, 399 F. App’x 688 (2d Cir. 2010); Spoto v. Herkimer County Trust, No. 99 Civ. 1476, 2000 WL 533293, at *3
n.2, 2000 U.S. Dist. LEXIS 6057, at *9 n.2 (N.D.N.Y. Apr. 27, 2000). The RICO statement form is available at
Complaint does not identify which predicate act or acts listed in §1961(1)(B) Defendants
allegedly committed. In any event, “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). Rule 9(b) requires a
plaintiff to “state with particularity the circumstances constituting fraud.” Fed. R. Civ. P. 9(b);
see also ECA & Local 134 IBEW Joint Pension Trust of Chi. v. JP Morgan Chase Co., 553 F.3d
187, 196 (2d Cir. 2009). In other words, a plaintiff must: “(1) detail the statements (or
omissions) that the plaintiff contends are fraudulent, (2) identify the speaker, (3) state where and
when the statements (or omissions) were made, and (4) explain why the statements (or
omissions) are fraudulent.” Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of
N.Y., 375 F.3d 168, 187 (2d Cir. 2004) (internal quotation marks omitted). “Allegations that are
conclusory or unsupported by factual assertions are insufficient.” ATSI Commc’ns, Inc. v. Shaar
Fund, Ltd., 493 F.3d 87, 99 (2d Cir. 2007).
Plaintiff alleges, among other things, that Deutsche Bank “concealed the material fact of
possession of accepted . . . lawful payments or securities . . . in order to unjustly take into
possession of plaintiffs’ property” and that Defendant Homecomings Financial, LLC “concealed
the fact that they were not a Federal Reserve Depository Bank,” the existence of a third-party
“warehouse lender,” and the “terms of the [s]ecuritization [a]greements.” (Dkt. No. 1, at 13).
While many of the allegations in the Complaint are detailed (though often incomprehensible),
they fail to meet Rule 9(b)’s particularity requirements because they do not state when and where
the statements were made and do not explain why the statements or omissions by Defendants
were fraudulent. See Anatian v. Coutts Bank (Switz.) Ltd., 193 F.3d 85, 88 (2d Cir. 1999)
(affirming dismissal of RICO claims for “failure to plead fraud with particularity” and noting
that “[e]ven if we were to find that the time and content of [the pleaded] communications met the
Rule 9(b) standard, plaintiffs’ claim must be dismissed because they failed to allege how those
statements were fraudulent”). Accordingly, there is no basis on which to find that the Complaint
or proposed Amended Complaint adequately alleges federal question jurisdiction.
Magistrate Judge Hummel explained that because, according to the Complaint, both
Plaintiff and Deutsche Bank are citizens of New York, regardless of the citizenship of the
remaining Defendants, Plaintiff “cannot demonstrate complete diversity jurisdiction.” (Dkt. No.
24, at 5). In support of her objection to Magistrate Judge Hummel’s conclusion with respect to
diversity, Plaintiff submitted an affidavit stating that she is a “nonresident alien.” (Dkt. No. 272). The affidavit further states, however, that Plaintiff was born in New York “which is one of
the sovereign States of the Union of several States joined together to comprise the confederation
known as the United States of America” and lists her address as Saratoga Springs, New York.
(Id. at 2, 6). Thus, Plaintiff’s objection is without merit. See 28 U.S.C. § 1332(a)(1) (federal
courts have subject matter jurisdiction on the basis of “diversity jurisdiction” “where the matter
in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is
between . . . citizens of different States”).
The proposed Amended Complaint, which names Trustco Bank as a Defendant, does not
cure this deficiency; it alleges that Trustco Bank is headquartered in Glenville, New York. (Dkt.
No. 28, at 2). Thus, there being, as discussed in Part II. B., no plausible federal claim in the
proposed Amended Complaint, the Court declines to exercise jurisdiction over the remaining
state-law claims. See Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988) (“[I]n the
usual case in which all federal-law claims are eliminated before trial, the balance of factors to be
considered under the pendent jurisdiction doctrine—judicial economy, convenience, fairness,
and comity—will point toward declining to exercise jurisdiction over the remaining state-law
Having concluded that the Complaint and proposed Amended Complaint fail to allege a
basis for federal question or diversity jurisdiction, the Court need not reach Plaintiff’s remaining
arguments with respect to the Report-Recommendation and denies Plaintiff’s motion for a TRO
as well as the motions to dismiss by Deutsche Bank and MERS. The Court, however, adopts
Magistrate Judge Hummel’s recommendation that Plaintiff be given an opportunity to amend her
complaint in the event she is able to demonstrate this Court’s jurisdiction.
For these reasons, it is
ORDERED that the Report-Recommendation and Order (Dkt. No. 24) is adopted in its
entirety; and it is further
ORDERED that the Complaint (Dkt. No. 1) and proposed Amended Complaint (Dkt.
No. 28) are dismissed without prejudice; and it is further
ORDERED that Plaintiff’s motion for a TRO (Dkt. No. 11) and motion for judicial
review (Dkt. No. 23) are denied as moot; and it is further
ORDERED that all of the pending motions to dismiss (Dkt. Nos. 14, 32, 35) are denied
as moot; and it is further
ORDERED that if Plaintiff fails to file a proposed amended complaint demonstrating
this Court’s jurisdiction within thirty (30) days of the date of this Order, the Clerk is directed to
close this case; and it is further
ORDERED that the Clerk serve a copy of this Order upon the parties in accordance with
the Local Rules.
IT IS SO ORDERED.
Dated: December 4, 2017
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