Miller et al v. HSBC Bank USA, N.A. et al

Filing 31

OPINION #105247 re: #21 MOTION to Dismiss amended complaint. filed by HSBC Bank USA, N.A. Based on the above conclusions, the motion of HSBC to dismiss Miller's AC is granted and the AC is dismissed with prejudice. (See Opinion.) (Signed by Judge Robert W. Sweet on 2/10/2015) (ajs) Modified on 2/19/2015 (ca).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------x
IVY MILLER,
Plaintiff,

13 Civ. 7500

-against-

OPINION

HSBC BANK USA, N.A.,
~,,,

Defendant.

USDCSDNY
DOCUMENT

----------------------------------------x

IELECI'RONICALLY

A P P E A RA N C E S:

IDOC#:
iEATE FILED:

Attorneys for Plaintiff
LAW OFFICE OF MICHAEL E. HERSKOWITZ, ESQ.
1999 Flatbush Avenue, Suite 201
New York, NY 11234
By:

Michael E. Herskowitz, Esq.

Attorneys for Defendant
PHILLIPS LYTLE LLP
The New York Times Building
620 Eighth Avenue, 23rd Floor
New York, NY 10018
By:

Sean C. McPhee, Esq.
Joseph B. Schmidt, Esq.

~

FILED

l

[~.,J5 :~ ..J

Sweet, D.J.

Defendant HSBC Bank USA, N .A.

("HSBC") has moved

pursuant to Federal Rules of Civil Procedure 8(a), 9(b), and
12 (b) ( 6) to dismiss the amended complaint ("AC") of plaintiff
Ivy Miller ("Miller" or "Plaintiff").

Based upon the

conclusions set forth below, the motion of HSBC is granted, and
the AC is dismissed with prejudice.

Prior Proceedings

This action was filed on October 24, 2013, on behalf
of 40 plaintiffs and against three different defendants - HSBC,
JPMorgan Chase Bank N.A.
("Caliber").

("Chase") and Caliber Horne Loans Inc.

On March 26, 2014, all plaintiffs voluntarily

dismissed their complaint as against Chase.

Two weeks later,

all plaintiffs, except for the first named plaintiff, Miller,
voluntarily dismissed their complaint against Caliber.

The

following day, all plaintiffs, again with the exception of
Miller, voluntarily dismissed their claims against HSBC.

The claims asserted on behalf of 39 of the 40 original
plaintiffs in this action were voluntarily dismissed in light of
the dismissals of identical claims brought by Miller's attorneys
1

on behalf of countless plaintiffs in no fewer than 12 other
actions recently filed in the United States District Court for
the Eastern District of New York.

1

On May 9, 2014, Miller amended her complaint to assert
claims solely by her and solely against HSBC.

That filing was

rejected by the Clerk of the Court as deficient on May 12, 2014.
Later that day, Miller re-filed the AC.
rejected by the Clerk of the Court.

That filing, too, was

The text of that rejection

states "leave to file expired May 9, 2014."

(See generally Dkt.

Nos. 17-19.)

The AC centers around HSBC's allegedly "fraudulent
loan modification program" and is based upon the claim of
entitlement to modification.

(See

AC~~

12-24, 37.)

The AC

also alleges that HSBC is liable for violations of the Home
Affordable Modification Program ("HAMP").

(See AC

~~

6, 21, 34,

35.)

1

See Brito v. FNF Servicing, Inc., 1:13-cv-02347-FB-VMS; Martin v. Bank of
America N.A., 1:13-cv-02350-ILGSMG; Nabedrik v. Emigrant Mortgage Company,
1:13-cv-02351-JBW-LB; Rivera v. JPMorgan Chase Bank, N.A., 1:13-cv-02352-RRMRLM; Manginelli v. Homeward Residential, Inc., 2:13-cv-02334-SJF-AKT; Cumia
v. PHH Mortgage Corporation, 2:13-cv-02335-JS-AKT; Traina v. HSBC Mortgage
Services, Inc., 2:13-cv-02336-SJFGRB; McQuoid v. Nationstar Mortgage, LLC.,
2:13-cv-02338-0RH-WOW; Lewis v. OneWest Bank, FSB, 2:13-cv-02340-0RH-ARL;
Green v. Citimortgage, Inc., 2:13-cv-02341-SJF-AKT; Norman v. Wells Fargo
Bank, N.A., 2:13-cv-02342 LOW-WOW; Yanes v. Ocwen Loan Servicing LLC, 2:13cv-02343-0RH-GRB.

2

The AC also alleges breach of contract, of the implied
covenant of fair dealing, promissory estoppel, fraudulent
concealment, violation of New York General Business Law

§

349,

unjust enrichment and violation of Real Estate Settlement
Practices Act

("RESPA"), 12 U.S.C.

§

2605(e).

(AC

<[<[

45-100.)

The motion of HSBC to dismiss the AC was heard and
marked fully submitted on October 29, 2014.

The Applicable Standard

On a motion to dismiss pursuant to Rule 12(b) (6), all
factual allegations in the complaint are accepted as true, and
all inferences are drawn in favor of the pleader.
Polar Molecular Corp., 12 F.3d 1170, 1174

Mills v.

(2d Cir. 1993).

However, a complaint must contain "sufficient factual matter,
accepted as true, to 'state a claim to relief that is plausible
on its face.'"

Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009)

(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007)).

A claim is facially plausible when "the plaintiff
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 663 (quoting Twombly,
3

550 U.S. at 556).

In other words, the factual allegations must

"possess enough heft to show that the pleader is entitled to
relief."

Twombly, 550 U.S. at 557 (internal quotation marks

omitted).

The AC Is Untimely

On May 15, 2014, Miller re-filed the AC and attached
to it a request for an extension of her deadline for leave to
file her the AC (the "Request").

(Dkt. No. 19.)

As shown in

the Request, HSBC agreed that it would not oppose Miller's
request for an extension of her deadline to file the AC on the
condition that she comply with Federal Rule of Civil Procedure 6
(b) (1) (B).

(Dkt. No. 19-1.)

Miller has not complied with Rule

6, has made no motion, has offered no good cause, and has
suggested no excusable neglect for failing to properly and
timely file the AC.

Accordingly, Miller's AC can be dismissed

for this reason alone.

The AC Fails To Set Forth An Enforceable Obligation

Under New York law, a borrower has no entitlement to a
permanent mortgage loan modification, and a lender is not liable
for breach of contract by failing to offer one.
4

See JP Morgan

Chase Bank, N.A. v. Ilardo, 940 N.Y.S.2d 829, 841 (N.Y. Sup. Ct.
2012).

In Ilardo, a borrower who had participated in a lender's

trial modification plan later applied for, and was denied, a
permanent loan modification.

When the borrower defaulted under

his loan, the lender commenced a foreclosure proceeding.

In

opposition, the borrower moved for summary judgment seeking a
judicially imposed permanent loan modification.

Id. at 832.

The Court denied the motion because the borrower could not
establish that the lender breached an enforceable obligation
imposed under the parties' agreement by failing to offer the
borrower a permanent loan modification.

Id. at 841.

Notably,

the Court held "there is no federal entitlement to a permanent
loan modification [and] the plaintiff did not breach the
[parties' contract] by failing to offer a permanent modification
of the loan."

Id.; see also In re Morales, No. 13-36516, 2014

WL 930199, at *5-6 (Bankr. S.D.N.Y. Mar. 10, 2014)
Ilardo,

(citing

940 N.Y.S.2d at 840); Fournier v. Bank of Arn. Corp., No.

13-CV-702, 2014 WL 421295, at *7

(N.D.N.Y. Feb. 4, 2014)

(holding that bank "was not obligated to offer Plaintiff a loan
modification due to the asserted 'wrongful delay and denials of
[Plaintiff's] modification application'")
N.Y.S.2d at 841).

5

(citing Ilardo, 940

Similarly, in Wells Fargo Bank, N.A. v. Meyers, 108
A.D.3d 9 (2d Dep't 2013), the Appellate Division reversed the
trial court's order imposing a loan modification on the lender.
In doing so, the Appellate Division held that the trial court
could not rewrite the mortgage because it would violate the
Contract Clause of the United States Constitution, stating:

Indeed, the Supreme Court's interpretation of
CPLR 3408(f) as authorizing it to, in effect,
rewrite the mortgage and loan agreement would
violate the Contract Clause of the United States
Constitution . . . [and] the remedy employed by
the Supreme Court here, in binding the parties to
terms never agreed upon by either side, is
without any source for its authority, and goes
well beyond what would be justified by the State
to safeguard the vital interests of its people.

Meyers, 108 A.D.3d at 22.

(internal quotation marks and

citations omitted).

The same result reached by the Ilardo Court applies
here.

HSBC had no obligation to permanently modify Miller's

mortgage loan simply because she may have been offered a
temporary loan modification.

Further, as in Meyers, imposing a

permanent loan modification on HSBC would amount to rewriting
the parties' agreement.

Because Miller is not entitled to a

permanent loan modification as a matter of law, the AC is
dismissed.

6

Plaintiff ignores Ilardo in her opposition and thus
concedes this dispositive issue.

The Breach Of Contract Claim Is Dismissed

To state a claim for breach of contract, the plaintiff
must allege: "(l) the existence of a contract,
by the party seeking recovery,

(2) performance

(3) non-performance by the other

party, and (4) damages attributable to the breach."

Kramer v.

N.Y. City Bd. of Educ., 715 F. Supp. 2d 335, 356 (E.D.N.Y. 2010)
(citations omitted).

In order to satisfy the first element, "a

plaintiff must plead the provisions of the contract upon which
the claim is based."
Supp. 2d 296, 322

James v. Countrywide Fin. Corp., 849 F.

(E.D.N.Y. 2012)

(citation omitted); see also

Fillmore E. BS Fin. Subsidiary LLC v. Capmark Bank, No. 11 Civ.
4 4 91, 2013 WL 12 9 4 519, at * 13
2014 WL 67665 (2d Cir. Jan.

( S . D. N . Y. Mar. 3 0, 2013) , a ff' d,

9, 2014)

("When pleading a .

breach of contract claim, the complaint must at a minimum set
forth the terms of the agreement upon which liability is
predicated, either by express reference or by attaching a copy
of the documents comprising the agreement."
marks and citation omitted)).

7

(internal quotation

Further, under New York law, "a modification of a
mortgage term .

is governed by the Statute of Frauds" and

"must be in writing to be enforceable."
Trust Corp., 255 A.D.2d 887, 889
Gen. Oblig. Law§ 5-703(1)

Pappas v. Resolution

(4th Dep't 1998)

(citing N.Y.

(McKinney 2012 & Supp. 2014)); see

also OneWest Bank, FSB v. Davies, No. 16638-11, 2013 WL 846573,
at *5

(N.Y. Sup. Ct. Feb. 22, 2013)

("Modification of mortgages

and/or forbearance agreements are subject to [New York's]
statute of frauds and accordingly, must be in writing to be
enforceable and signed by the party to be charged."

(citing N.Y.

Gen. Oblig. Law§ 5-703(4))).

Miller's breach of contract claim is based on the
theory that HSBC breached the terms of an alleged "trial
modification" agreement when it failed to provide her with a
permanent loan modification.
that .

(See AC p. 1 ("Plaintiff argues

. she sought a permanent loan modification agreement

through Defendant, its agents, and successors-in-interest as
servicers of Plaintiff's loan but was denied a proper
modification and her performance under the trial modification
contract was frustrated"); see also

AC~~

47-48, 52.)

However, New York courts have routinely held that
there "is no requirement that a foreclosing [mortgagee] modify
8

its mortgage loan prior to or after a default in payment."

US

Bank N.A. v. Orellana, 40 Misc. 3d 1204(A), 975 N.Y.S.2d 370, at
*3 (N.Y. Sup. Ct. 2013); Graf v. Hope Bldg. Corp., 254 N.Y. 1, 4
(1930)

(holding that courts cannot force mortgagees to make loan

modifications and holding that in "the absence of some act by
the mortgagee which a court of equity would be justified in
considering unconscionable, he is entitled to the benefit of the
covenant"); Rajic v. Faust, 39 Misc.3d 1234(A), 972 N.Y.S.2d
146, at *6 (N.Y. Sup. Ct. 2013)

(noting that courts do not have

power to force agreements on parties).

"This rule is no less

applicable to cases wherein the borrower performs all
preliminary steps imposed upon the securing any such
modification or refinance arrangements."

Valley Nat. Bank v. 58

Vlimp, LLC, 39 Misc.3d 122l(A), 972 N.Y.S.2d 147, at *5 (N.Y.
Sup. Ct. 2013).

In addition, Miller fails to attach the alleged
modification agreement to her pleading or otherwise "adequately
plead the terms of any contract" with HSBC.

Abraham v. Am. Home

Mortg. Servicing, Inc., 947 F. Supp. 2d 222, 235 (E.D.N.Y. 2013)
(citation omitted)

("To survive a motion to dismiss a contract

claim, the 'Plaintiff must provide specific allegations as to an
agreement between the parties, the terms of that agreement, and
what provisions of the agreement were breached as a result of
9

the acts at issue.'"); James, 849 F. Supp. 2d at 322

(granting

motion to dismiss where plaintiff had "not specifically
identified the contract (or contracts) at issue and ha[d] not
specified the terms of the agreement that defendant purportedly
breached" (citation omitted)) .

Further, Miller's unsupported claim that she "suffered
damages," without any further factual enhancement, is not enough
to properly plead the damages element of a breach of contract
claim.

See Bravo v. MERSCORP, Inc., No. 12-CV-884

2013 WL 1652325, at *6 (E.D.N.Y. Apr. 16, 2013)

(ENV) (LB),

("A claim for

breach of contract must rest on more than a conclusory
allegation that the defendant's breach caused damages, even
where the exact amount of damages is alleged." (citation
omitted)).

Miller, in her opposition, fails to even identify a
contract to serve as the foundation for her breach of contract
claim but contends that, under Federal Rule of Civil Procedure
9(c), she need only generally allege satisfaction of certain
unidentified conditions precedent in order to state a claim.
(Pl.' s Opp' n 3.)

She then alleges that she both satisfied those

conditions precedent and was also "hindered" from completing
them.

Id.
10

Plaintiff's contention regarding conditions precedent
fails, not because she inadequately alleged satisfaction of
certain conditions, but because she failed to sufficiently
allege the existence of an agreement to modify her loan.

For

this reason, the exact same breach of contract claim in a nearly
identical action filed by Miller's attorneys was recently
dismissed.

See Arroyo v. PHH Mortg. Corp., No. 13-CV-

2335(JS) (AKT), 2014 WL 2048384, at *7-9 (E.D.N.Y. May 19, 2014).
The Arroyo court expressly rejected the same condition precedent
arguments stating "[t)o characterize the provision of documents
as a 'condition precedent' is somewhat of a mischaracterization.
Moreover, the terms of the contractual arrangement, if any, are
insufficiently pled."

Id. at *8.

The Arroyo court also

rejected the same cases that Miller relies upon here because,
unlike the plaintiffs in those cases, Arroyo (like Miller) did
not allege the existence of a modification agreement.

Arroyo,

2014 WL 2048384, at *7-8.

Finally, a modification of a mortgage term is governed
by the Statute of Frauds and "must be in writing to be
enforceable."

Pappas, 255 A.D.2d at 889; OneWest Bank, 2013 WL

846573, at *5; N.Y. Gen. Oblig. Law§ 5-703(1)
Supp. 2014).

(McKinney 2012 &

Miller has not alleged a written agreement to
11

modify her mortgage and by arguing that HSBC should be estopped
from relying on the Statute of Frauds, Miller concedes that the
purported agreement to modify her mortgage was not reduced to
writing and signed by HSBC.

Estoppel is only appropriate,

however, where there is an "unconscionable injury" resulting
from a promise to modify the loan.

Klein v. Jamor Purveyors,

Inc., 108 A.D.2d 344, 349, 489 N.Y.S.2d 556, 560 (2d Dep't
1985).

Miller has not alleged an unconscionable injury and her

"unsubstantiated allegations .
Frauds are insufficient.

. of waiver" of the Statute of

Carver Fed. Sav. Bank v. Redeemed

Christian Church of God, 35 Misc. 3d 1228(A), 954 N.Y.S.2d 758,
at *5 (N.Y. Sup. Ct. 2012).

Accordingly, the breach of contract claim is
dismissed.

The Breach Of Implied Covenant Of Good Faith And Fair Dealing
Claim Is Dismissed

To adequately allege a claim for breach of the
covenant of good faith and fair dealing adequately, a party must
first allege "the existence of a contract."
Mortg. Servicing Inc.,

Kapsis v. Am. Home

923 F. Supp. 2d 430, 452

(E.D.N.Y. 2013);

see also United Magazine Co. v. Murdoch Magazines Distrib., 146

12

F. Supp. 2d 385, 405 (S.D.N.Y. 2001), aff'd, United Magazine Co.
v. Curtis Circulation Co., 279 F. App'x 14 (2d Cir. 2008)
(dismissing an action when plaintiffs failed to allege a valid
contract because "[a] cause of action for breach of this implied
covenant

. is dependent upon the existence of an enforceable

contract") .

In that regard, as with a breach of contract claim,

the pleader must "set forth the terms of the agreement upon
which liability is predicated, either by express reference or by
attaching a copy of the documents comprising the agreement."
Fillmore E. BS Fin. Subsidiary LLC, 2013 WL 1294519, at *13
(citation omitted).

Although New York recognizes a cause of action for
breach of the implied covenant of good faith and fair dealing in
certain situations, "[n]o obligation can be implied . .

which

would be inconsistent with other terms of the contractual
relationship."

Sheth v. N.Y. Life Ins. Co., 273 A.D.2d 72, 73,

709 N.Y.S.2d 74, 75 (1st Dep't 2000)

(citation omitted); see

also Fesseha v. TD Waterhouse Investor Servs., Inc., 305 A.D.2d
268, 268, 761 N.Y.S.2d 22, 23 (1st Dep't 2003)

(duty of good

faith and fair dealing "cannot be construed so broadly as
effectively to nullify other express terms of a contract, or to
create independent contractual rights.")

Here, Miller has

acknowledged that she entered into a loan and mortgage
13

agreement, which governs the parties' relationship (AC

~~

4, 7)

and that she defaulted under the terms of that loan and mortgage
agreement

(AC~

17).

Miller claims, however, that HSBC breached

the implied covenant of good faith and fair dealing by charging
her late fees,

interest and other delinquency related fees

simply because she could not pay them.

(AC~

59(C)).

Because

Miller does not allege that those charges are prohibited by the
mortgage, this claim fails, as it would nullify the terms of the
mortgage in contravention of New York law.

A claim for breach of the implied covenant of good
faith and fair dealing will also be dismissed as redundant if it
rests on the same factual predicates as the claim for breach of
contract.

Matsumura v. Benihana Nat'l Corp., 465 F. App'x 23,

29 (2d Cir. 2012)

("Plaintiffs based their breach of good faith

claim on the same operative facts as their breach of contract
claim; accordingly, the District Court did not err in dismissing
the former claim as duplicative of the latter."); see also Boart
Longyear Ltd. v. Alliance Indus. Inc., 869 F. Supp. 2d 407, 420
(S.D.N.Y. 2012).

Here, Miller's claim for breach of implied

covenant of good faith and fair dealing is based on the exact
same facts as her breach of contract claim and is therefore
redundant.

(Compare

AC~~

46-55 with

14

AC~

59(A) .)

Finally, if a breach of contract claim is barred by
the Statute of Frauds, so too is a claim for breach of the
implied covenant of good faith and fair dealing.
Am. Talent Agency,

See Thiam v.

Inc., 11 Civ. 1465 (GBD), 2012 WL 1034901, at

*6 (S.D.N.Y. Mar. 27, 2012)

("Having failed to allege an oral

agreement that is enforceable under the Statute of Frauds,
Defendants cannot plead a third claim for breach of the covenant
of good faith and fair dealing in the alternative."); United
Magazine Co., 146 F. Supp. 2d at 405 (holding that because the
breach of contract claim was barred by the Statute of Frauds, so
too was the breach of the implied covenant of good faith and
fair dealing claim).

As demonstrated above, Miller cannot

establish that the loan modification she was allegedly offered
was reduced to writing.

The Promissory Estoppel Claim Is Dismissed

"[P]romissory estoppel has three elements:
and unambiguous promise,

(1) a clear

(2) a reasonable and foreseeable

reliance by the party to whom the promise is made, and (3) an
injury sustained by the party asserting the estoppel by reason
of the reliance."
Supp. 2d 275, 287
citation omitted).

Paxi, LLC v. Shiseido Ams. Corp., 636 F.
(S.D.N.Y. 2009)

(internal quotations and

If a promissory estoppel claim
15

"circumvent[s] the Statute of Frauds, a party must demonstrate
unconscionable injury, i.e., injury beyond that which flows
naturally (expectation damages)
unenforceable agreement."

from the non-performance of the

720 Lex Acquisition LLC v. Guess?

Retail, Inc., No. 09 Civ. 7199 (DAB), 2011 WL 5039780, at *4
(S.D.N.Y. Oct. 21, 2011)

(citation omitted); see also United

Magazine Co., 146 F. Supp. 2d at 405 ("A claim for promissory
estoppel may not be maintained under New York law where the
alternative claim for breach of contract is barred by the
Statute of Frauds, unless the circumstances make it
unconscionable to deny the promise upon which the plaintiff
relied.")

Like the prior two causes of action, Miller's
promissory estoppel claim fails because Miller's allegations are
impermissibly vague and conclusory; an unsupported contention
that HSBC "intentionally represented that Plaintiff could obtain
loan modification," coupled with bald allegations of harm and
reliance, is insufficient.

(AC

~~

62-65); see also Jirjis v.

Wachovia, Case No. 10-11728, 2011 WL 87247, at *5 (E.D. Mich.
Jan. 11, 2011)

(holding that an "oblique reference to a promise"

without identification of the manner in which the promise was
allegedly made, coupled with a formulaic recitation of reliance
and harm, are "unsupported allegations and conclusory
16

recitations [that] cannot withstand a 12(b) (6) motion to dismiss
under Twombly and Iqbal.")

Miller's promissory estoppel claim also fails because
she does not allege unconscionable injury, which she must do to
survive a motion to dismiss.
5039780, at *4

720 Lex Acquisition LLC, 2011 WL

(S.D.N.Y. Oct. 21, 2011).

claim is dismissed.

Accordingly, this

Miller contends that she is not required to

allege an "unconscionable injury" because "Defendant is estopped
from asserting that defense due to its own improper actions."
(Pl.'s Opp'n 11.)

However, she is indeed required to plead an

unconscionable injury in order to avoid application of the
Statute of Frauds, which she admittedly failed to do.
Lex Acquisition LLC, 2011 WL 5039780, at *4.

See 720

Further, Miller's

assertion that she "forewent opportunities to use other remedies
to save her home" (Pl.'s Opp'n 10) does not adequately specify
what other alternatives were available to her and, as explained
above, is insufficient to invoke an equitable exception to the
Statute of Frauds.

The Fraudulent Concealment Claim Is Dismissed

In alleging fraud,

"a party must state with

particularity the circumstances constituting fraud."
17

Fed. R.

Civ. P. 9(b).

A fraudulent concealment claim must meet Rule

9(b)'s heightened pleading requirements.

See Fagan v.

AmerisourceBergen Corp., 356 F. Supp. 2d 198, 218
2004)

(E.D.N.Y.

(applying Rule 9(b) to fraudulent concealment).

Miller must set forth "(l) what the omissions were;
person responsible for the failure to disclose;

To do so,

(2) the

(3) the context

of the omissions and the manner in which they misled the
plaintiff, and (4) what defendant obtained through the fraud."
Malmsteen v. Berdan, LLP,
2007)

477 F. Supp. 2d 655, 664

(S.D.N.Y.

(internal quotation marks and citation omitted).

Miller's allegations fall short of Rule 9(b)'s
requirements because she fails to plead "the who, what, when,
where and how of the alleged fraud."

Bauman v. Mount Sinai

Hosp., 452 F. Supp. 2d 490, 503 (S.D.N.Y. 2006)
omitted); see also Abraham,

(citation

947 F. Supp. 2d at 234

(dismissing

fraud claims because plaintiff failed to meet "the pleading
requirements of Rule 9(b)" where plaintiff did "not identif[y] a
single fraudulent statement made to her

[or] a single

speaker who made a fraudulent statement or material omission"
and did "not indicate[ ] where or when any fraudulent statements
or material omissions were made").

Miller does not identify

individuals, dates or any factual context for the alleged
misrepresentations and omissions by HSBC.
18

Nor does she identify

the alleged omissions with any meaningful degree of specificitybroad categorical descriptions regarding "opportunities for loan
modifications" and a failure to "disclose .

. motives to see

Plaintiff remain in default," are simply not enough.

(AC '1!'1! 67,

69); see also Altschuler v. Univ. of Pa. Law Sch., No. 95 CIV.
2 4 9, 19 9 7 WL 12 9 3 9 4 , at * 15 ( S . D. N . Y. Mar . 21, 19 9 7 ) , a ff' d, 201
F. 3d 4 3 0 ( 2d Cir. 199 9)

(holding that plaintiff's "broad

description[s] of . . . defendants' misrepresentations" without
an "identif [ication of] any particular, specific
misrepresentation[s]" failed to meet Rule 9(b) 's particularity
requirement).

It is also well settled that "a concealment of facts
supports a cause of action for fraud only if the non-disclosing
party has a duty to disclose."

Remington Rand Corp. v.

Amsterdam-Rotterdam Bank, N.V.,

68 F.3d 1478, 1483 (2d Cir.

1995) .

"Such a duty ordinarily arises where the parties are in

a fiduciary or other relationship signifying a heightened level
of trust."

Id.

"In the absence of a fiduciary relationship, a

duty to disclose may arise if:

(1) one party makes a partial or

ambiguous statement that requires additional disclosure to avoid
misleading the other party, or (2) one party possesses superior
knowledge, not readily available to the other, and knows that

19

the other is acting on the basis of mistaken knowledge."
1484

Id. at

(internal quotation marks and citation omitted).

When attempting to establish a duty to disclose based
on partial representations or superior knowledge, the pleader
"must allege facts giving rise to a duty to disclose" with the
specificity required by Rule 9(b).

See Odyssey Re

(London) Ltd.

v. Stirling Cooke Brown Holdings Ltd., 85 F. Supp. 2d 282, 296
(S.D.N.Y. 2000), aff'd, 2 F. App'x 109 (2d Cir. 2001)
omitted); see also Merrill Lynch,
Young, No.

91 Civ. 2923

Mar. 15, 1994)

Pierce,

(citation

Fenner & Smith v.

(CSH), 1994 WL 88129, at *11

(S.D.N.Y.

(stating that plaintiff must plead with

"particularity" the "context in which a duty to disclose may
have arisen," and "[i]nferences and allusions" to circumstances
under which "a general duty to disclose may arise do not
withstand Rule 9(b)

scrutiny").

HSBC did not owe Miller a fiduciary duty.
Iannuzzi v. Am. Mortg. Network,
(E.D.N.Y. 2010)

Inc., 727 F. Supp. 2d 125, 138

("As a general matter, a lender is not a

fiduciary of its borrower .
Long Island Sav. Bank,
1999)

See

FSB,

.")

(citation omitted); Weil v.

77 F. Supp. 2d 313, 323

(E.D.N.Y.

("Under New York law, the legal relationship between a

borrower and a bank is a contractual one and does not give rise
20

to a fiduciary relationship.").

Miller's alleged participation

in a temporary modification is not "sufficient to create a
special trust relationship."

Wigod v. Wells Fargo Bank, N.A.,

673 F.3d 547, 571 (7th Cir. 2012)

(dismissing fraudulent

concealment claim based on lack of "special trust relationship"
stemming from trial mortgage modification agreement between
parties).

Again, Miller fails to establish that a written

modification agreement with HSBC existed, let alone that it
created a "special trust relationship."

Finally, Miller's bare allegation that HSBC "possessed
and utilized its superior knowledge,"

(AC~

73), is insufficient

since "asymmetric information alone does not show the degree of
dominance needed to establish a special trust relationship."
Wigod,

673 F.3d at 573.

Miller also fails to allege any facts

in conclusory fashion or otherwise - to support a duty to
disclose based on partial misrepresentations.

The Claim For A Violation Of New York General Business Law
Section 349 Is Dismissed

"A plaintiff under [General Business Law] section 349
must prove three elements: first, that the challenged act or
practice was consumer-oriented; second, that it was misleading

21

in a material way; and third, that the plaintiff suffered injury
as a result of the deceptive act."
N.Y.2d 24, 29 (2000)
complaint under GBL

Stutman v. Chem. Bank, 95

(internal citations omitted).
§

Thus, a

349 must allege facts demonstrating that

the disputed conduct had a broad impact on consumers at large
and not just on the plaintiff.

See, e.g., Vitolo v. Mentor H/S,

Inc., 426 F. Supp. 2d 28, 36 (E.D.N.Y. 2006), aff'd, 213 F.
App'x. 16 (2d Cir. 2007), cert. denied, 552 U.S. 815 (2007)
(dismissing GBL

§

349 claim that focused on plaintiff's losses).

Where a plaintiff makes only conclusory allegations of
impact on consumers at large, a GBL
dismissed.

§

349 claim must be

See Banc of Am. Commercial Fin. Corp. v.

Issacharoff, 188 Misc. 2d 790, 798

(N.Y. Sup. Ct. 2000)

(citing

New York Univ. v. Cont'l Ins. Co., 87 N.Y.2d 308, 314, 321
(1995)

(holding that GBL

§

349 claim was insufficient despite

allegations of numerous instances of similar bad-faith practices
respecting policyholders nationwide)); see also Harary v.
Allstate Ins. Co.,

983 F. Supp. 95, 99 (E.D.N.Y. 1997)

("conclusory assertion" of "injur[ies]

[to] the public at large

is insufficient" to state a consumer protection claim) .

Here, Miller cannot maintain a claim under GBL

§

349

because she has not alleged damage to the consuming public at
22

large.

She has alleged nothing more than injury to herself

resulting from a private contractual dispute, which is
insufficient to state a claim under GBL
Supp. at 98

§

349.

Harary,

983 F.

(New York law precludes consumer protection claim

unless wrongful conduct "impact[s]

. consumers generally.

Private contractual disputes are .

not within the [consumer

protection] statute").
GBL

§

Indeed, as the Court held in Fournier, a

349 claim must be dismissed when a plaintiff's claims, as

here, "only implicate Defendants' conduct towards plaintiff
. and lack[ ] any assertion demonstrating that Defendants
engaged in deceptive business practices with the public in
general."

2014 WL 421295, at *8.

Miller's GBL

§

Based on the foregoing,

349 claim is dismissed.

In her opposition, Miller contends, without citation
to any legal authority, that "[l]oan modifications are consumeroriented acts or practices."

(Pl.'s Opp'n 14.)

Miller's

argument fails because claims concerning an individual's
mortgage transaction are "specific to [those individuals], and
do not universally apply to other mortgages or impact the public
at large."

Silverman v. Household Fin. Realty Corp. of N.Y.,

979 F. Supp. 2d 313, 318

(E.D.N.Y. 2013).

dismissed the exact same GBL

§

The Arroyo court

349 claim because the plaintiff's

allegations of alleged injury (like Miller's here) were
23

conclusory.

Arroyo, 2014 WL 2048384, at *11.

Accordingly,

Miller's identical claim is dismissed.

The Unjust Enrichment Claim Is Dismissed

"The theory of unjust enrichment lies as a quasicontractual claim.

It is an obligation the law creates in the

absence of any agreement."

McAnaney v. Astoria Fin. Corp., 665

F. Supp. 2d 132, 175 (E.D.N.Y. 2009)
(citation omitted).

(emphasis in original)

"A cognizable unjust enrichment claim

requires a showing (1) that the defendant benefitted;

(2) at the

plaintiff's expense; and (3) that equity and good conscience
require restitution."
10-cv-4148

Fitzgerald v. Chase Home Fin., LLC, No.

(CS), 2011 WL 9195046, at *7

(S.D.N.Y. Feb. 28, 2011)

(internal quotation marks and citation omitted).

"The essence

of such a claim is that one party has received money or a
benefit at the expense of another."

Id.

(internal quotation

marks and citation omitted).

Miller's unjust enrichment claim is based on her
theory that HSBC was "unjustly enriched .

[b]y preventing

Plaintiff from making reduced monthly payments [and] caus[ing]
Plaintiff's debt to increase, and further interest to accrue on
the loan principal."

(AC '!I'll 90-91.)
24

However, a claim for

unjust enrichment does not lie where there is an agreement
between the parties.

Here, the existence of Miller's mortgage

agreement, which she admittedly entered into
defaulted under

(AC~

(AC~

4), and

17), precludes this claim.

In addition, HSBC Mortgage was not unjustly enriched
by allegedly "preventing" Miller from making "reduced monthly
payments."

Miller's mortgage payments were owed pursuant to her

admitted contractual obligations, which she defaulted under (AC
~~

4'

1 7) .

Finally, to the extent that additional interest
accrued on Miller's outstanding loan balance, that was simply
the result of her admitted failure to make her contractually
mandated payments.

(AC~

17); Fournier, 2014 WL 421295, at *7

("Interest accrued on the loan because, by her own admission,
Plaintiff voluntarily stopped making mortgage payments").
Indeed, as the New York Court of Appeals held in Love v. State,
78 N.Y.2d 540, 544

(1991), the accrual of interest "is not a

penalty [but instead] it is simply the cost of having the use of
another person's money for a specified period."

See also

Heraeus Precious Metals Mgmt., LLC v. Kitco Int'l, Ltd., 11 CIV.
7536, 2012 WL 4714784, at *2, n.2

25

(S.D.N.Y. Oct. 2, 2012).

Miller's opposition claims that she was "predestined
to remain in foreclosure" as a result of HSBC's allegedly
"deficient modification protocols," which allegedly increased
the amount of interest that she owes, resulting in "unjust
gains."

(Pl.'s Opp'n 16.)

Miller, however, fails to identify

in what way, or by how much, the interest she admittedly owes
increased.

She also fails to describe how this is attributable

to HSBC as opposed to her own admitted failure to pay her
mortgage loan.

(AC 'IT 17.)

The accrual of interest is solely

attributable to Miller's admitted failure to make the
contractually required loan payments.
WL 421295, at *7

See, e.g., Fournier, 2014

("Interest accrued on the loan because, by her

own admission, Plaintiff voluntarily stopped making mortgage
payments"); Love, 78 N.Y.2d at 544

(the accrual of interest "is

not a penalty [but instead] it is simply the cost of having the
use of another person's money for a specified period.")

For

these reasons, the unjust enrichment claim is dismissed.

The RESPA Claim Is Dismissed

Miller's RESPA claim, is based on an alleged violation
of 12 U.S.C. § 2605(e) governing qualified written requests
("QWR") and 12 C.F.R. §1024.35(e) (3) concerning her alleged
submission of a "notice of error."

In support of this claim,

26

--------

Miller makes a conclusory allegation that she sent a QWR to HSBC
and that she suffered damages based on HSBC's alleged nonresponsiveness.

(AC~~

97-98, 100.)

Miller makes the same

allegation with respect to her purported notice of error.
~~

99-100.)

(AC

However, Miller must plead with more specificity,

indicating, for instance, "when a QWR was sent, to whom it was
sent, why it was sent, and a summary of the request" contained
in the QWR.

See Kapsis,

923 F. Supp. 2d at 446 (finding that

plaintiff sufficiently pled QWRs were sent); see also Blanchard
v. Northway Bank, No. 13-CV-119, 2013 WL 1775460, at *2
Apr. 25, 2013)

(D.N.H.

(noting that a RESPA claim which failed to

"attach the alleged QWR" or provide "any factual allegations
describing [the QWR's] contents," would constitute "nothing more
than the type of 'label or conclusion' the Supreme Court has
held to be insufficient to state a claim for relief"); Moore v.
U.S. Bank, N.A., No. 1:12-CV-1087, 2013 WL 1500594, at *3 (W.D.
Mich. Apr. 10, 2013)

(dismissing RESPA claim where borrower "has

presented no facts showing that he made a QWR, besides his
conclusory allegation"); Hurd v. BAC Home Loans Servicing, LP,
880 F. Supp. 2d 747, 768

(N.D. Tex. 2012)

(dismissing RESPA

claim where borrower failed to allege "a communication meeting
the requirements of" a QWR) .

27

The Fournier Court dismissed a nearly identical RESPA
claim where "Plaintiff failed to allege, in non-conclusory
terms, that any of her four alleged QWRs complied with the
statutory definition of a QWR."

2014 WL 421295, at *5.

In

doing so, the Court cited RESPA's definition of a QWR which
requires a "statement of the reasons for the belief of the
borrower, to the extent applicable, that the account is in error
or provides sufficient detail to the servicer regarding other
information sought by the borrower." 2

Id.

Here, as in Fournier,

Miller fails to allege in non-conclusory terms that she sent a
QWR (or a notice of error)

that complies with RESPA and she did

not attach her purported QWR (or notice of error) to her AC
her initial complaint).

(or

(AC '!I'll 41-43.)

Miller's "claim" based upon 12 C.F.R. § 1024.35 also
fails because that regulation does not provide a private right
of action for damages.

Instead, the only effect that receipt of

a notice of error has is to prohibit a mortgage servicer, for
sixty days after receipt of a notice of error,

from furnishing

"adverse information to any consumer reporting agencies
regarding any payment that is the subject of the notice of
error".

12 C.F.R. § 1024.35(i) (1).

2

Section 1024.35 provides

Like the definition of a QWR, to qualify as a "notice of error," the notice
must include "the name of the borrower, information that enables the servicer
to identify the borrower's mortgage loan account, and the error the borrower
believes has occurred." See 12 C.F.R. 1024.35(a).

28

that "nothing in this section shall limit or restrict a lender
or servicer from pursuing any remedy it has under applicable
law, including initiating foreclosure or proceeding with a
foreclosure sale."

See 12 C.F.R. §1024.35(i) (2).

Because

Section 1024.35 includes the remedies available, and because a
private right of action for alleged damages is not among them,
Miller's notice of error claim is rejected.

See, e.g., Nat' l

R.R. Passenger Corp. v. Nat'l Ass'n of R.R. Passengers, 414 U.S.
453, 458

(1974)

("when legislation expressly provides a

particular remedy or remedies, courts should not expand the
coverage of the statute to subsume other remedies.")

Finally, Miller's claim of damages in the form of
"financial loss and severe mental anguish and emotional
distress,"

(AC~

100), is also conclusory and unsupported and,

therefore, fails as a matter of law.

Roth v. CitiMortgage,

Inc., No. 12-CV-2446, 2013 WL 5205775, at *7
2013)

(E.D.N.Y. Sept. 11,

In Roth, the Court dismissed a RESPA claim where the

plaintiff, like Miller here, failed to plead "actual" financial
damages and "failed to allege any facts to support the assertion
that the alleged RESPA violations proximately caused her
'emotional distress and harm.'"

Id. at *7-8; see also Gorbaty

v. Wells Fargo Bank, N.A., No. 10-CV-3291 (NGG) (SMG), 10-CV-3354
(NGG) (SMG), 2012 WL 1372260, at *5
29

(E.D.N.Y. Apr. 18, 2012)

("[Plaintiff's] Complaints fail to state a§ 2605 claim because
they do not identify any damages she sustained as a result of
[servicer's]

. violations of § 2605"); Hepler v. Washington

Mut. Bank, F.A., No. CV 07-4804 CAS (Ex), 2009 WL 1045470, at *5
(C.D. Cal. Apr. 17, 2009)

(dismissing RESPA claim which contains

only a "conclusory statement" of actual damages).

Miller does not distinguish Defendant's cases, but
claims that her alleged QWR was sufficiently detailed because it
inquired about "suspected violations, including accounting and
servicing errors," and that she sufficiently pled damages in the
form of "actual harms connected with Plaintiff's inability to
conduct her own investigation or consider her alternatives in
the absence of an adequate response to her QWR."
17-18.)

(Pl.'s Opp'n

The Arroyo court rejected the exact same arguments

holding:

Arroyo asserts that she has 'stated specifics
concerning [her] QWR submissions as well as the
nature of Defendant's suspected violations,
including accounting and ownership issues.'
The
Court, however, will not scour the Amended
Complaint and attempt to piece Arroyo's claim
together for her.

Arroyo, 2014 WL 2048384, at *13 (citation omitted); see also
Fournier, 2014 WL 421295, at *5 ("Plaintiff failed to allege, in
non-conclusory terms, that any of her four alleged QWRs complied
30

with the statutory definition of a QWR").

As such, the RESPA

claim is dismissed.

The AC Is Dismissed With Prejudice

Although Rule 15(a) (2) of the Federal Rules of Civil
Procedure provides that a party should be given leave to amend
"when justice so requires," leave to amend is not required
where, as here, a further amendment would be futile.
Curcione, 657 F.3d 116, 123-24
amendment would be futile,

(2d Cir. 2011)

Hill v.

("Where a proposed

leave to amend need not be given.")

(citing Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106
F.3d 11, 18

(2d Cir. 1997)).

Miller has had ample opportunity to correct the
deficiencies in her pleadings and has been unable to do so.
Indeed, the gravamen of the allegations in Miller's AC is that
she was not offered a permanent loan modification.
13.)

(AC

<[<[

11-

Under New York law, however, Miller is not entitled to a

permanent loan modification as a matter of law and HSBC is not
liable for failing to offer her one.

See, e.g., Fournier, 2014

WL 421295, at *7; Ilardo, 940 N.Y.S.2d at 841.

31

A third attempt by Miller to state a claim in this
action would be futile.

See In re Merrill Lynch & Co., Inc.

Research Reports Sec. Litig., 273 F. Supp. 2d 351, 390

(S.D.N.Y.

2003), aff'd sub nom. Lentell v. Merrill Lynch & Co., Inc., 396
F.3d 161 (2d Cir. 2005), cert. denied, 546 U.S.

935

(2005)

(plaintiffs had no right to amend and re-plead where they had
"ample opportunity to craft their complaints" and were on notice
of pleading deficiencies).

Therefore, because Miller's

deficient pleading cannot be remedied by amendment, her AC is
dismissed with prejudice.
10 CIV.

Konowaloff v. Metro. Museum of Art,

9126 SAS, 2011 WL 4430856, at *8

2011) aff'd, 702 F.3d 140

(2d Cir. 2012)

(S.D.N.Y. Sept. 22,
("This is [plaintiff's]

second attempt to craft a viable complaint, and its shortcomings
are of the sort that cannot be remedied by amendment.
Accordingly,

I dismiss the Amended Complaint with prejudice.")

32

Conclusion

Based on the above conclusions, the motion of HSBC to
dismiss Miller's AC is granted and the AC is dismissed with
prejudice.

7

New York, NY
February {If , 2o15

()µ_e

RT W. SWEET
U.S.D.J.

33