Buczek v. Pretend Lender-Keybank National et al

Filing 11

DECISION AND ORDER DENYING Plaintiff's 3 Motion to Stay State Foreclosure Proceedings; DISMISSING Plaintiff's federal claims with prejudice; DECLINING to exercise supplemental jurisdiction over Plaintiff's state claims, which are DISMISSED without prejudice under 28 U.S.C. § 1367(c)(3); DENYING leave to amend; CERTIFYING pursuant to 28 U.S.C. § 1915(a)(3) and Rule 24 (a)(3) of the Federal Rules of Appellate Procedure, that any appeal from this Decision and Order wou ld not be taken in good faith; DENYING leave to appeal as a poor person; DIRECTING the Clerk of Court to CLOSE this case. Signed by William M. Skretny, United States District Judge on 3/24/2017. (MEAL) Copy mailed to Plaintiff.- CLERK TO FOLLOW UP -

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

DEBORAH ANN BUCZEK,
Plaintiff,
v.

DECISION AND ORDER
15-CV-651S

KEYBANK NATIONAL, ET AL.,
Defendants.

I. INTRODUCTION
Presently before this Court is pro se Plaintiff Deborah Ann Buczek’s complaint
and motion to stay state foreclosure proceedings. (Docket Nos. 1 and 3.) Because
Buczek has been granted in forma pauperis status (Docket No. 9), her complaint is
subject to the screening provisions in 28 U.S.C. § 1915 (e)(2)(B). For the reasons
stated below, Buczek’s motion to stay state foreclosure proceedings is denied and her
complaint is dismissed with prejudice.
II. BACKGROUND
Cognizant of the distinct disadvantage that pro se litigants face, federal courts
routinely read their submissions liberally and interpret them to raise the strongest
arguments that they suggest. See Haines v. Kerner, 404 U.S. 519, 520, 92 S. Ct. 594,
596, 30 L. Ed. 2d 652 (1972); Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994).
Since Buczek is proceeding pro se, this Court has considered her submissions and
arguments accordingly.

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Under 28 U.S.C. § 1915 (e)(2)(B), a court must dismiss a case in which in forma
pauperis status has been granted if, at any time, the court determines that the action (i)
is frivolous or malicious; (ii) fails to state a claim upon which relief may be granted; or
(iii) seeks monetary relief against a defendant who is immune from such relief. If the
court plainly lacks jurisdiction to consider the complaint, dismissal of the complaint as
“frivolous” under 28 U.S.C. § 1915 (e)(2) is proper. See McGann v. Comm’r, Soc. Sec.
Admin., 96 F.3d 28, 30 (2d Cir. 1996). The screening process is intended to be “an
efficient means by which a court can screen for and dismiss legally insufficient claims.”
Abbas v. Dixon, 480 F.3d 636, 639 (2d Cir. 2007) (citing Shakur v. Selsky, 391 F.3d
106, 112 (2d Cir. 2004)).
Section 1915 (e)(2)(B) and Rule 12 (b)(6) of the Federal Rules of Civil Procedure
allow for dismissal of a complaint for failure to state a claim upon which relief can be
granted. Federal pleading standards are generally not stringent: Rule 8 requires only a
short and plain statement of a claim. FED. R. CIV. P. 8 (a)(2). “Specific facts are not
necessary;” the plaintiff “need only ‘give the defendant fair notice of what the . . . claim
is and the grounds upon which it rests.’” Erickson v. Pardus, 551 U.S. 89, 93, 127 S.
Ct. 2197, 167 L. Ed. 2d 1081 (2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555, 127 S. Ct. 1955, 1966, 167 L. Ed. 2d 929 (2007)) (internal quotation and citation
omitted). But the plain statement must “possess enough heft to show that the pleader is
entitled to relief.” Twombly, 550 U.S. at 555.
When determining whether a complaint states a claim, the court must construe it
liberally, accept all factual allegations as true, and draw all reasonable inferences in the
plaintiff’s favor. ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir.

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2007).

Legal conclusions, however, are not afforded the same presumption of

truthfulness. See Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d
868 (2009) (“the tenet that a court must accept as true all of the allegations contained
in a complaint is inapplicable to legal conclusions”).
To survive, “a complaint must contain sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.’” Iqbal, 129 S.Ct. at 1945 (quoting
Twombly, 550 U.S. at 570).

Labels, conclusions, or “a formulaic recitation of the

elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Facial plausibility
exists when the facts alleged allow for a reasonable inference that the defendant is
liable for the misconduct charged. Iqbal, 129 S.Ct. at 1949. The plausibility standard is
not, however, a probability requirement: the pleading must show, not merely allege, that
the pleader is entitled to relief. Id. at 1950; FED. R. CIV. P. 8 (a)(2). Well-pleaded
allegations in the complaint must nudge the claim “across the line from conceivable to
plausible.” Twombly, 550 U.S. at 570.
A two-pronged approach is thus used to examine the sufficiency of a complaint,
which includes “any documents that are either incorporated into the complaint by
reference or attached to the complaint as exhibits.” Blue Tree Hotels Inv. (Can.), Ltd. v.
Starwood Hotels & Resorts Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004). This
examination is context specific and requires that the court draw on its judicial
experience and common sense. Iqbal, 129 S.Ct. at 1950. First, statements that are not
entitled to the presumption of truth, such as conclusory allegations, labels, and legal
conclusions, are identified and stripped away. See Iqbal, 129 S.Ct. at 1950. Second,
well-pleaded, non-conclusory factual allegations are presumed true and examined to

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determine whether they “plausibly give rise to an entitlement to relief.” Id. “Where the
well-pleaded facts do not permit the court to infer more than the mere possibility of
misconduct,” the complaint fails to state a claim. Id.
In pro se actions, the United States Supreme Court has rejected the idea that the
plausibility standard requires amplification with factual allegations to render the claim
plausible. In Erickson, the Supreme Court reversed the dismissal of a prisoner’s Eighth
Amendment claim, holding that the court of appeals had “depart[ed] from the liberal
pleading standards” of Rule 8(a). Boykin v. KeyCorp, 521 F.3d 202, 214 (2d Cir. 2008)
(quoting Erickson, 127 S.Ct. at 2200). Although the Court did not clarify when the
plausibility standard requires factual amplification, it noted that “a pro se complaint
however inartfully pleaded, must be held to less stringent standards than formal
pleadings drafted by lawyers.” Erickson, 127 S.Ct at 2200 (quoting Estelle v. Gamble,
429 U.S. 97, 106, 97 S. Ct. 285, 50 L. Ed. 2d 251 (1976)).
Upon determination that a pro se complaint is deficient, a court will generally
afford the plaintiff an opportunity to amend or to be heard before dismissal, “unless the
court can rule out any possibility, however unlikely it might be, that an amended
complaint would succeed in stating a claim.” Abbas, 480 F.3d at 639 (2d Cir. 2007)
(quoting Gomez v. USAA Fed. Savings Bank, 171 F.3d 794, 796 (2d Cir. 1999) (per
curiam)). But leave to amend need not be afforded when amendment would be futile,
such as when the proposed claim could not withstand a Rule 12 (b)(6) motion. See
Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir.
2002).

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In her complaint, Buczek alleges that various individuals and entities violated the
Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601, et seq., and N.Y. Gen. Bus. Law §
349, by failing to recognize her rescission of a “line of credit of $50,000” obtained on
October 7, 2008, and “an extension of credit” obtained on February 23, 2007, either or
both of which were allegedly secured by her principal dwelling at 7335 Derby Road in
Derby, N.Y. 1 (Complaint, ¶¶ 24-26, 34, 36, 43.) Buczek alleges that she exercised her
right to rescind these transactions on June 22, 2015, when she sent written
correspondence to “all known parties in interest.” (Complaint, ¶ 32.) The basis for
Buczek’s rescission is that she did not receive certain documents required under TILA
at the time of closing. (Complaint, ¶ 28.) Buczek alleges that the defendants ignored
her rescission correspondence or, in the case of Defendant KeyBank National, refused
to accept it. (Complaint, ¶¶ 34, 35, 39.)
Buczek asserts that she has properly rescinded these transactions under 15
U.S.C. § 1635, and therefore all further proceedings concerning these transactions,
including continuation of the state foreclosure proceedings, violate her statutory rights.
She seeks a declaration that these transactions are rescinded as well as actual and
statutory damages. Buczek also seeks a stay of the state foreclosure proceedings.
(Docket No. 3.)

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Buczek also references the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq., on
the cover page of her complaint, but she does not assert any meaningful allegations or claims under that
statute.

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III. DISCUSSION
A.

Younger Abstention and the Anti-Injunction Act
Before examining the sufficiency of Buczek’s TILA claims, this Court addresses

her requests for declaratory and injunctive relief relating to rescission of the transactions
at issue and a stay of the state foreclosure proceedings.
Federal courts must abstain from exercising jurisdiction when federal review
would disrupt ongoing state proceedings. Younger v. Harris, 401 U.S. 37, 91 S. Ct.
746, 27 L. Ed. 2d 669 (1971). This is because “even though either a federal or a state
court could adjudicate a given claim, when there is an ongoing state proceeding in
which the claim can be raised, and when adjudicating the claim in federal court would
interfere unduly with the ongoing state proceeding, the claim is more appropriately
adjudicated in state court.” Kirschner v. Klemons, 225 F.3d 227, 236 (2d Cir. 2000).
Three classes of state proceedings fall within the scope of Younger abstention:
(1) state criminal prosecutions; (2) civil enforcement proceedings; and (3) civil
proceedings that “implicate a State’s interest in enforcing the orders and judgments of
its court.” Sprint Commc’ns, Inc. v. Jacobs, 134 S. Ct. 584, 588, 591, 187 L. Ed. 2d 505
(2013); New Orleans Pub. Serv., Inc. v. Council of City of New Orleans, 491 U.S. 350,
367-68, 109 S. Ct. 2506, 105 L. Ed. 2d 298 (1989).
Under the third class of proceedings, Younger precludes a federal court from
granting declaratory or injunctive relief concerning property that is also the subject of
ongoing state proceedings. See Calizaire v. Mort. Elec. Registration Sys., Inc., 14-CV1542 (CBA)(SMG), 2017 WL 895741, at *3 (E.D.N.Y. Mar. 6, 2017) (ongoing state
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foreclosure action); Abbatiello v. Wells Fargo Bank, N.A., No. 15-CV-4210 (SFJ)(ARL),
2015 WL 5884797, at *4 (E.D.N.Y. Oct. 8, 2015) (ongoing state foreclosure action);
Haynie v. New York Housing Auth., 14-CV-5633, 2015 WL 502229, at *2 (E.D.N.Y. Feb.
5, 2015) (ongoing state foreclosure action).
A federal court’s authority to enjoin state proceedings is additionally constrained
by the Anti-Injunction Act, which provides that “[a] court of the United States may not
grant an injunction to stay proceedings in a State court except as expressly authorized
by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or
effectuate judgments.” 28 U.S.C. § 2283. The Anti-Injunction Act applies when the
requested injunction would either stay the ongoing state proceedings or prevent the
parties from enforcing an order that has already issued. Atl. Coast Line R.R. Co. v.
Brotherhood of Locomotive Eng’rs., 398 U.S. 281, 294, 90 S. Ct. 1739, 26 L. Ed. 2d 234
(1970)); Abbatiello, 2015 WL 5884797, at *5. In this circuit, courts have long held that
the Anti-Injunction Act applies to state foreclosure proceedings. See Ungar v. Mandell,
471 F.2d 1163, 1165 (2d Cir. 1972); Abbatiello, 2015 WL 5884797, at *5 (collecting
cases).
Here, Buczek seeks declaratory and injunctive relief, including a stay, with regard
to the state foreclosure proceedings. As set forth above, this relief is barred by the
Younger abstention doctrine and the Anti-Injunction Act.

Buczek’s equitable claims

must therefore be dismissed and her motion to stay the state foreclosure proceedings
must be denied.

See Calizaire, 2017 WL 895741, at *3 (dismissing claims for

“injunctive and declaratory relief relating [to] the same property that is the subject matter
of the underlying foreclosure action in state court”).
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B.

Truth in Lending Act
Although the Younger abstention doctrine and Anti-Injunction Act bar Buczek’s

equitable claims, they do not bar her claims for monetary damages. See Kirschner, 225
F.3d at 238; Fraser v. Aames Funding Corp., 16 CV 448 (AMD)(LB), 2017 WL 564727,
at *4 (E.D.N.Y. Jan. 23, 2017). Nonetheless, Buczek’s TILA claims are barred by the
applicable statute of repose, and therefore must be dismissed.
TILA was enacted “to assure a meaningful disclosure of credit terms so that the
consumer will be able to compare more readily the various credit terms available to him
and avoid the uninformed use of credit, and to protect the consumer against inaccurate
and unfair credit billing and credit card practices.” 15 U.S.C. § 1601 (a).
Under TILA, a borrower who enters a credit transaction secured by his or her
principal dwelling has a statutory right to rescind the transaction “until midnight of the
third business day following the consummation of the transaction,” or until the lender
delivers certain forms and disclosures required by TILA, whichever is later. See 15
U.S.C. § 1635 (a); Beach v. Ocwen Fed. Bank, 523 U.S. 410, 411, 118 S. Ct. 1408, 140
L. Ed. 2d 566 (1998) (“Under [TILA], when a loan made in a consumer credit transaction
is secured by the borrower’s principal dwelling, the borrower may rescind the loan
agreement if the lender fails to deliver certain forms or to disclose important terms
accurately.”). If the lender fails to provide the forms and disclosures required by TILA,
the borrower’s right to rescind expires three years after the consummation date of the
transaction or upon the sale of the property, whichever occurs first. See 15 U.S.C. §
1635 (f).

At the end of the three-year period, the borrower’s right to rescind is

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“completely extinguish[ed].” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 413, 118 S. Ct.
1408, 140 L. Ed. 2d 566 (1998) (noting that § 1635 (f) governs “the life of the underlying
right [of rescission],” as distinguished from simply limiting the time for bringing a suit,
and observing that [§ 1635 (f)] “talks not of a suit’s commencement but of a right’s
duration”). This is so even if the disclosures required under TILA are never made. Id.
at 413; Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790, 792, 190 L. Ed. 2d
650 (2015) (“Even if a lender never makes the required disclosures, the “right of
rescission shall expire three years after the date of consummation of the transaction or
upon the sale of the property, whichever comes first.” (quoting 15 U.S.C. § 1635 (f))
(emphasis in original)).
The TILA claims here are time-barred. Buczek alleges that Defendant Keybank
National failed to provide her all of the forms and disclosures required by TILA at the
time she consummated her transactions—on February 23, 2007, and October 7, 2008.
(Complaint, ¶¶ 25, 26, 43.) She further alleges that she attempted to rescind these
transactions under TILA by written correspondence sent on June 22, 2015, almost
seven years after the later transaction.

(Complaint, ¶¶ 32, 35.)

This attempted

rescission thus came well after the three-year rescission periods expired. It is therefore
untimely.

Because Buczek’s right to rescind these transactions has been forever

extinguished, see Beach, 523 U.S. at 413, her TILA claims must be dismissed as to all
the defendants for failure to state a claim upon which relief can be granted.

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C.

State Claims
Having disposed of Buczek’s federal claims, this Court finds it appropriate to

decline to exercise supplemental jurisdiction over whatever state claims may be
cognizable in the complaint. See 28 U.S.C. § 1367(c)(3). The United States Supreme
Court has instructed that courts should ordinarily decline to exercise supplemental
jurisdiction in the absence of federal claims. See Carnegie-Mellon Univ. v. Cohill, 484
U.S. 343, 350 n. 7, 108 S. Ct. 614, 98 L. Ed. 2d 720 (1988) (noting that in the usual
case where all federal claims are eliminated before trial, the relevant factors informing
the decision of whether to exercise supplemental jurisdiction will “point towards
declining to exercise jurisdiction over the remaining state-law claims”); United Mine
Workers of Am. v. Gibbs, 383 U.S. 715, 726, 86 S. Ct. 1130, 16 L. Ed. 2d 218 (1966)
(“Certainly, if the federal claims are dismissed before trial, . . . the state claims should
be dismissed as well.”).
The Second Circuit shares this view: where “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 claims.” Valencia ex rel.
Franco v. Lee, 316 F.3d 299, 305 (2d Cir. 2003); see also Marcus v. AT&T Corp., 138
F.3d 46, 57 (2d Cir. 1998) (“In general, where the federal claims are dismissed before
trial the state claims should be dismissed as well.”)
Accordingly, this Court declines to exercise supplemental jurisdiction over
whatever state claims may be present in Buczek’s complaint.
dismissed without prejudice under 28 U.S.C. § 1367(c)(3).
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They are instead

D.

Leave to Amend
The Second Circuit has held that “a district court should not dismiss a pro se

complaint without granting leave to amend at least once, unless amendment would be
futile.” Garcia v. Superintendent of Great Meadow Corr. Facility, 841 F.3d 581, 583 (2d
Cir. 2016) (per curiam) (internal quotation marks omitted). Amendment would indeed
be futile here, where Buczek’s rescission claims have been forever extinguished.
Consequently, leave to amend will not be granted.
IV. CONCLUSION
For the foregoing reasons, this Court finds that Buczek’s federal TILA claims
must be dismissed with prejudice. Buczek’s state claims, however, will be dismissed
without prejudice.
V. ORDERS
IT HEREBY IS ORDERED, that Plaintiff’s Motion to Stay State Foreclosure
Proceedings (Docket No. 3) is DENIED.
FURTHER, that Plaintiff’s federal claims are DISMISSED with prejudice.
FURTHER, that this Court declines to exercise supplemental jurisdiction over
Plaintiff’s state claims, which are DISMISSED without prejudice under 28 U.S.C. §
1367(c)(3).
FURTHER, that leave to amend is DENIED.

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FURTHER, that this Court hereby certifies, pursuant to 28 U.S.C. § 1915(a)(3)
and Rule 24 (a)(3) of the Federal Rules of Appellate Procedure, that any appeal from
this Decision and Order would not be taken in good faith and therefore leave to appeal
as a poor person is DENIED. See Coppedge v. United States, 369 U.S. 438, 82 S. Ct.
917, 8 L. Ed. 2d 21 (1962).
FURTHER, that the Clerk of Court is directed to CLOSE this case.
SO ORDERED.

Dated:

March 24, 2017
Buffalo, New York
/s/William M. Skretny
WILLIAM M. SKRETNY
United States District Judge

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