Straker v. Deutsche Bank National Trust as Trustee et al

Filing 97

MEMORANDUM (Order to follow as separate docket entry)Signed by Honorable A. Richard Caputo on 3/28/2013. (cw)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ALLISON STRAKER,
CIVIL ACTION NO. 3:09-CV-338

Plaintiff,

(JUDGE CAPUTO)

v.

(MAGISTRATE JUDGE CARLSON)
DEUTSCHE BANK NATIONAL TRUST,
as Trustee, et al.,
Defendants.
MEMORANDUM
Presently before the Court are Magistrate Judge Martin C. Carlson’s Report and
Recommendations (“R&R”) to the Motions for Summary Judgment filed by Defendant
Fremont Reorganizing Corporation, f/k/a/ Fremont Investment & Loan (“Fremont”) (Doc. 73)
and Defendants Deutsche Bank National Trust Company, as Trustee (“Deutsche Bank”)
and HomEq Servicing Corporation (“HomEq”) (Doc. 74).

Magistrate Judge Carlson

recommends granting both motions. (Docs. 92–93.) Plaintiff Allison Straker timely filed
objections to the R&Rs, which the Court has considered. For the following reasons, the
Court will adopt the R&Rs and grant the moving Defendants’ summary judgment motions.
BACKGROUND
A. Factual Background
In March 2006, Ms. Straker entered into an agreement of sale to purchase property
at 506 Skyline Drive, Blakeslee, Pennsylvania. (Doc. 76 at 3.) She engaged a mortgage
broker, Penn American Mortgage Company (“Penn American”), to help her obtain financing
to purchase the property. (Straker Dep. at 23:22–25, 26:5–13.) On May 23, 2006, Penn
American submitted Ms. Straker’s loan application to Fremont, who approved her for two
subprime purchase money mortgage loans in the amount of $144,160.00 and $36,040.00.
(Doc. 89 at 4; Doc. 76 at 3.)
A closing was held on the loan transaction on June 2, 2006. (Doc. 89 at 11; Doc. 76
at 3.) Although Ms. Straker informed Penn American before the closing that she wanted

a loan with a fixed interest rate, she was never told her that her loan would have a fixed
interest rate. (Straker Dep. at 33:12–34:3, 35:2–15.) At some point prior to the closing,
Penn American told Ms. Straker that the interest rate on her loan would be 8.50%. (Id. at
34:4–7.) At the closing, Ms. Straker signed each of the documents evidencing the two
Fremont loans (Id. at 44:24–57:25), but neither read nor asked any questions about any of
them (Id. at 45:14–20, 46:12–15, 51:17–23). Several of those documents—the Adjustable
Rate Note, the Adjustable Rate Rider, and the Adjustable Rate Mortgage Loan Program
Disclosure—prominently indicated that the loans had an adjustable interest rate with an
initial rate of 10.50%. (Doc. 73, Exs. D–F.) Ms. Straker did not speak with Fremont
regarding the terms of the loan before or after the closing, nor did Fremont directly
communicate with her. (Straker Dep. at 38:13–20, 58:13–60:22.)
Following the closing, Fremont disbursed over $170,000.00 on Ms. Straker’s behalf,
which she used to purchase the Blakeslee property. (Doc. 73, Ex. B.) The larger of the two
mortgage loans, which is the only loan at issue in this action, was later sold and assigned
by Fremont, through its nominee, Mortgage Electronic Registration Systems, Inc. (“MERS”),
to Barclays Bank PLC in August 2006. (Doc. 76 at 3.) The loan was subsequently
assigned to Deutsche Bank in June 2007. (Doc. 74, Ex. 2.) Fremont transferred the
servicing rights to the loan to HomeEq in October 2006 and has had no involvement with
the loan since then. (Doc. 76 at 4.)
In December 2006, Ms. Straker defaulted on her mortgage obligations. (Straker Dep.
at 64:23–65.) She has not made any payments on her loan since 2007. (Id. at 65:14–17.)
On May 2, 2007, Deutsche Bank commenced a mortgage foreclosure action against Ms.
Straker in the Court of Common Pleas of Monroe County, Pennsylvania. (Doc. 23, Ex. B.)
On June 17, 2007, the state court entered a default judgment against Ms. Straker in the
amount of $161,775.27, issued a writ of execution, and scheduled a sheriff’s sale for the
Blakeslee property for October 25, 2007. The sale was postponed and subsequently stayed
when Ms. Straker filed a Chapter 13 bankruptcy petition with the United States Bankruptcy
Court for the Middle District of Pennsylvania on October 10, 2007. See In re Allison Straker,
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No. 5:07-BK-52636. After the bankruptcy court dismissed her case on January 8, 2008, Ms.
Straker again filed a Chapter 13 petition on January 30, 2008.1 See In re Allison Straker,
No. 5:08-BK-50260. That case was dismissed on July 8, 2008, and she filed another
Chapter 13 petition on February 26, 2009. See In re Allison Straker, No. 5:09-BK-1295.
Her most recent bankruptcy case was converted to a Chapter 7 proceeding on April 5,
2011, and is still pending before the bankruptcy court.
On February 23, 2009, Ms. Straker commenced this action by filing a pro se
Complaint against Deutsche Bank, MERS, Fremont, HomEq, Penn American, Fidelity Home
Abstract (“Fidelity”),2 and 1,000 John Doe Defendants. (Doc. 1.) After the Court dismissed
Ms. Straker’s Complaint without prejudice (Doc. 24), she filed an Amended Complaint on
March 16, 2010 (Doc. 27). On April 1, 2010 Deutsche Bank, MERS, and HomEq moved
to dismiss the Amended Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1)
and 12(b)(6). (Doc. 30.) Fremont also moved to dismiss the Amended Complaint on similar
grounds on April 21, 2010. (Doc. 33.) In a Memorandum and Order dated February 3,
2011, the Court granted in part and denied in part the motions to dismiss. (Doc. 50.)
Specifically, the Court dismissed all claims against MERS, Ms. Straker’s Real Estate
Settlement Procedures Act (“RESPA”)3 claims against Fremont and Deutsche Bank, and
her Racketeer Influenced and Corrupt Organizations (“RICO”)4 claims. (Id.) On February
10, 2011, Fremont filed a crossclaim against Fidelity and Penn American. (Doc. 51.)
On January 15, 2012, Fremont filed a motion for summary judgment.5 (Doc. 73.)

1

Ms. Straker notes that these two bankruptcy proceedings were an attempt to
“make arrangements” with Deutsche Bank regarding the Blakeslee property.
(Straker Dep. at 65:18–67:17.)

2

Neither Fidelity nor Penn American have entered appearances in this matter.

3

12 U.S.C. §§ 2601–2617.

4

18 U.S.C. § 1964.

5

Ms. Straker’s declaratory judgment, fraudulent inducement, unjust enrichment,
and civil conspiracy claims remain against Fremont.

3

Deutsche Bank and HomEq moved for summary judgment the following day.6 (Doc. 74.)
On April 3, 2012, Ms. Straker filed a brief in response to Fremont’s summary judgment
motion (Doc. 89) and a declaration in response to Deutsche Bank and HomEq’s summary
judgment motion (Doc. 88).7 On April 26, 2012, Magistrate Judge Carlson issued a R&R
on Fremont’s Motion for Summary Judgment (Doc. 92) and a R&R on Deutsche Bank and
HomEq’s Motion for Summary Judgment (Doc. 93).
B. The Magistrate Judge’s R&Rs
1. R&R on Fremont’s Motion for Summary Judgment
Magistrate Judge Carlson recommends that the Court grant summary judgment in
Fremont’s favor on all claims remaining against it. (Doc. 92 at 5.) He also recommends
that the Court grant summary judgment in favor of Fremont on Ms. Straker’s common law
fraudulent inducement claim because it was brought beyond the applicable two-year statute
of limitations and is thus time-barred under Pennsylvania law. (Id. at 9–16.) Alternatively,
he recommends that summary judgment be entered on the fraudulent inducement claim
because Ms. Straker has not adduced any evidence that Fremont made false statements
or misrepresentations to her, that she relied on any allegedly false statements, or that
Fremont discouraged or prevented her from reviewing the loan documents at the closing.
(Id. at 16–19.) Similarly, he recommends that Court grant summary judgment in Fremont’s
favor on Ms. Straker’s common law civil conspiracy claim because it is time-barred, or,
alternatively, since she has not supplied any evidence in support of it. (Id. at 9–16,19–21.)
Magistrate Judge Carlson further recommends that the Court grant Fremont

6

Deutsche Bank is not mentioned or identified in any of Ms. Straker’s remaining
claims. The only remaining claim against HomEq is a RESPA claim pursuant to
12 U.S.C. § 2605(e).

7

The declaration does not address the summary judgment arguments made by
Deutsche Bank and HomEq. Rather, it challenges the foreclosure judgment
obtained by Deutsche Bank as void on the grounds that she was not personally
served (Doc. 88 at ¶ 4) and Deutsche Bank lacked standing to sue (Id. at ¶¶
12–15).

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summary judgment on Ms. Straker’s unjust enrichment claim, as she has not pointed to any
evidence to support the claim, which is also unavailable due to her undisputed contractual
relationship with Fremont. (Id. at 22–24.) Finally, he recommends that summary judgment
be entered in Fremont’s favor on Ms. Straker’s declaratory judgment claim because her
substantive claims against Fremont fail as a matter of law and she has not supported this
claim with evidence. (Id. at 24–27.)
2. R&R on Deutsche Bank and HomEq’s Motion for Summary Judgment
Magistrate Judge Carlson also recommends that the Court grant summary judgment
in favor of Deutsche Bank and HomEq on all of Ms. Straker’s claims because she has not
made an argument in opposition to their summary judgment motion, or, alternatively,
because her claims fail as a matter of law. (Doc. 93 at 13–14.) He recommends that
summary judgment be entered in HomEq’s favor on Ms. Straker’s RESPA claim because
she has not presented evidence of damages that are causally linked to HomEq’s alleged
failure to timely respond to her qualified written request. (Id. at 22–26.) Additionally, he
recommends that summary judgment be entered in Deutsche Bank’s favor on Ms. Straker’s
declaratory judgment, fraudulent inducement, unjust enrichment, and civil conspiracy claims
because it is undisputed that they “relate entirely to events predating the assignment of this
mortgage to Deutsche Bank,” who took the mortgage free and clear of all claims and
defenses under Pennsylvania law as a holder in due course. (Id. at 14–16.) Magistrate
Judge Carlson also declined to address the merits of Ms. Straker’s declaration, which
challenges the judgment obtained by Deutsche Bank in its state court mortgage foreclosure
action, pursuant to the Rooker–Feldman doctrine. (Id. at 17–21.)
C. Objection
Ms. Straker timely filed objections to Magistrate Judge Carlson’s R&Rs on May 15,
2012. (Doc. 94.) In her objections, Ms. Straker contends that the 2007 state court
mortgage foreclosure judgment entered against her is void and should be stricken. (Id. at
2–5.) The gravamen of her argument is that because Deutsche Bank did not possess a
valid assignment of the mortgage when it commenced the mortgage foreclosure action, it
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was not the real party in interest and did not have standing to sue her. (Id. at 2–7.) Ms.
Straker contends that as a result, the state court was without jurisdiction to enter judgment
in favor of Deutsche Bank and against her in that action. (Id. at 5–7.) She invites the Court
to vacate the judgment and believes that the Rooker–Feldman doctrine does not prevent
the Court from doing so in this instance. (Id. at 3–5.)
LEGAL STANDARDS
A. Standard for Reviewing a Report and Recommendation
Where objections to the Magistrate Judge's report are filed, the court must conduct
a de novo review of the contested portions of the report. Sample v. Diecks, 885 F.2d 1099,
1106 n. 3 (3d Cir. 1989) (citing 28 U.S.C. § 636(b)(1)(c)). However, this only applies to the
extent that a party's objections are both timely and specific. Goney v. Clark, 749 F.2d 5,
6–7 (3d Cir. 1984). In conducting a de novo review, the court may accept, reject, or modify,
in whole or in part, the factual findings or legal conclusions of the magistrate judge. See 28
U.S.C. § 636(b)(1); Owens v. Beard, 829 F. Supp. 736, 738 (M.D. Pa. 1993). Although the
review is de novo, the law permits the court to rely on the recommendations of the
magistrate judge to the extent it deems proper. See United States v. Raddatz, 447 U.S.
667, 675–76, (1980); Goney, 749 F.2d at 7; Ball v. United States Parole Comm'n, 849 F.
Supp. 328, 330 (M. D. Pa. 1994). Uncontested portions of the report may be reviewed at
a standard determined by the district court. See Thomas v. Arn, 474 U.S. 140, 154 (1985);
Goney, 749 F.2d at 7. At the very least, the court should review uncontested portions for
clear error or manifest injustice. See, e.g., Cruz v. Chater, 990 F.Supp. 375, 376–77 (M.D.
Pa. 1998). As such, the Court reviews the portions of the R&R to which the plaintiff objects
de novo. The remainder of the R&R is reviewed for clear error.
B. Summary Judgment Standard
Summary judgment shall be granted “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). “Summary judgment is appropriate when ‘the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show
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that there is no genuine issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.’” Wright v. Corning, 679 F.3d 101, 103 (3d Cir. 2012)
(quoting Orsatti v. N.J. State Police, 71 F.3d 480, 482 (3d Cir. 1995)). A fact is material if
proof of its existence or nonexistence might affect the outcome of the suit under the
applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Where there is no material fact in dispute, the moving party need only establish that
it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). Where, however, there
is a disputed issue of material fact, summary judgment is appropriate only if the factual
dispute is not a genuine one. Anderson, 477 U.S. at 248. An issue of material fact is
genuine if “a reasonable jury could return a verdict for the nonmoving party.” Id. Where
there is a material fact in dispute, the moving party has the initial burden of proving that: (1)
there is no genuine issue of material fact; and (2) the moving party is entitled to judgment
as a matter of law. See 2D Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 2727 (2d ed.1983). The moving party may present its own evidence or, where
the nonmoving party has the burden of proof, simply point out to the court that “the
nonmoving party has failed to make a sufficient showing on an essential element of her
case.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
“When considering whether there exist genuine issues of material fact, the court is
required to examine the evidence of record in the light most favorable to the party opposing
summary judgment, and resolve all reasonable inferences in that party's favor.” Wishkin
v. Potter, 476 F.3d 180, 184 (3d Cir. 2007). Once the moving party has satisfied its initial
burden, the burden shifts to the non-moving party to either present affirmative evidence
supporting its version of the material facts or to refute the moving party's contention that the
facts entitle it to judgment as a matter of law. Anderson, 477 U.S. at 256–57. The Court
need not accept mere conclusory allegations, whether they are made in the complaint or
a sworn statement. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990). And, “[t]o
defeat summary judgment, [the non-moving party] ‘cannot rest simply on the allegations in
the pleadings,’ but ‘must rely on affidavits, depositions, answers to interrogatories, or
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admissions on file.’” GFL Advantage Fund, Ltd. v. Colkitt, 272 F.3d 189, 199 (3d Cir. 2001)
(quoting Bhatla v. U.S. Capital Corp., 990 F.2d 780, 787 (3d Cir. 1993)); see also Tilden Fin.
Corp. v. Palo Tire Serv., Inc., 596 F.2d 604, 608 (3d Cir. 1979).
“To prevail on a motion for summary judgment, the non-moving party must show
specific facts such that a reasonable jury could find in that party's favor, thereby establishing
a genuine issue of fact for trial.” Galli v. N.J. Meadowlands Comm'n, 490 F.3d 265, 270 (3d
Cir. 2007) (citing Fed. R. Civ. P. 56(e)). “While the evidence that the non-moving party
presents may be either direct or circumstantial, and need not be as great as a
preponderance, the evidence must be more than a scintilla.” Id. (quoting Hugh v. Butler
Cnty. Family YMCA, 418 F.3d 265, 267 (3d Cir. 2005)). In deciding a motion for summary
judgment, “the judge's function is not himself to weigh the evidence and determine the truth
of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477
U.S. at 249.
DISCUSSION
Although Ms. Straker makes a number of arguments in her objections to the R&Rs,
none respond to the recommendations made by Magistrate Judge Carlson, address the
summary judgment arguments made by the moving Defendants, or relate to the causes of
action in her Amended Complaint.

Instead, she contends that the 2007 mortgage

foreclosure default judgment entered against her is void, as Deutsche Bank lacked standing
to sue and the state court lacked jurisdiction, and should be stricken by the Court. (Doc.
94 at 2–5.) Her objections, which are irrelevant to the substance of the R&Rs and this
action, will not be addressed by the Court. Having reviewed both R&Rs for clear error or
manifest injustice and finding none, the Court will adopt Magistrate Judge Carlson’s
recommendations and grant the moving Defendants’ summary judgment motions.
Accordingly, summary judgment will be entered in favor or Fremont, Deutsche Bank, and
HomEq on all of Ms. Straker’s claims against them.
CONCLUSION
For the above stated reasons, the Magistrate Judge’s Report and Recommendations
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(Docs. 92–93) will be adopted and the summary judgment motions of Fremont (Doc. 73)
and Deutsche Bank and HomEq (Doc. 74) will be granted.
An appropriate order follows.

March 28, 2013
Date

/s/ A. Richard Caputo
A. Richard Caputo
United States District Judge

9