United States of America v. Kleh

Filing 19

MEMORANDUM OPINION AND ORDER - IT IS ORDERED as follows: 1. The dfts motion to dismiss (Doc. 7), is DENIED. 2. Pursuant to Federal Rule of Civil Procedure 17(c), a guardian ad litem shall be appointed to represent the interests of R.K. in this litiga tion. The parties shall meet, confer, and if possible jointly agree upon an appropriate guardian ad litem to propose to the court on or before January 12, 2018. 3. The parties shall then file a status report, or appropriate motions disposing of this action, on or before March 12, 2018. Signed by Magistrate Judge Martin C. Carlson on December 6, 2017. (kjn)

UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA,

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Plaintiff,
vs.
R.K., a Minor,
Defendant.

Civil No. 3:17-CV-1514

(Magistrate Judge Carlson)

MEMORANDUM OPINION AND ORDER
I.

Factual Background
This mortgage foreclosure action has been assigned to the undersigned on

the consent of the parties. The well-pleaded facts in the complaint disclose that on
July 30, 2010 a certain real property mortgage was entered into and acknowledged
by the mortgagor and record owner of the real estate at issue in this lawsuit, Lesley
V. Scott ("Mortgagor"). (Doc. 6.) The mortgage was given to secure a promissory
note signed by the Mortgagor. The Mortgagor subsequently fell deeply into default
on this note, loan and mortgage, a circumstance which justified foreclosure under
the terms of this note, loan agreement and mortgage. (Id.)
The Mortgagor died on January 12, 2017, intestate, and is survived by her
heir-at-law, the minor defendant named in this lawsuit, R.K. (Id.) R.K. has now
filed a motion to dismiss, or strike, the complaint in this case. (Doc. 7.) This
motion raises a specific and narrow claim, arguing that R.K., the minor heir to the
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Mortgagor’s estate is not a proper nominal party defendant in this lawsuit. Thus,
R.K. does not dispute the default, or the plaintiff’s entitlement to proceed with a
foreclosure action. Rather R.K. simply asserts that he should not be named as the
nominal defendant in this case. This motion is fully briefed by the parties, (Docs. 8
and 12), and is therefore ripe for resolution.
For the reasons set forth below, this motion to dismiss will be denied, but we
will establish a process to fully protect the rights of the minor nominal defendant,
R.K.
II.

Discussion
A.

Motion to Dismiss–Standard of Review

A motion to dismiss is designed to test the legal sufficiency of a complaint.
Thus, Rule 12(b)(6) of the Federal Rule of Civil Procedure provides for the
dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim
upon which relief can be granted. The moving party bears the burden of showing
that no claim has been stated, Hedges v. United States, 404 F.3d 744, 750 (3d Cir.
2005), and dismissal is appropriate only if, accepting all of the facts alleged in the
complaint as true, the plaintiff has failed to plead “enough facts to state a claim to
relief that is plausible on its face,” Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
570 (2007) (abrogating “no set of facts” language found in Conley v. Gibson, 355
U.S. 41, 45-46 (1957)). The facts alleged must be sufficient to “raise a right to

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relief above the speculative level.” Twombly, 550 U.S. 544, 555. This requirement
“calls for enough fact[s] to raise a reasonable expectation that discovery will reveal
evidence” of necessary elements of the plaintiff’s cause of action. Id. at 556.
Furthermore, in order to satisfy federal pleading requirements, the plaintiff must
“provide the grounds of his entitlement to relief,” which “requires more than labels
and conclusions, and a formulaic recitation of the elements of a cause of action will
not do.” Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008)
(brackets and quotation marks omitted) (quoting Twombly, 550 U.S. at 555). Thus,
“[a]t the motion to dismiss stage, we accept as true all factual assertions, but we
disregard threadbare recitals of the elements of a cause of action, legal conclusions,
and conclusory statements.” James v. City of Wilkes-Barre, 700 F.3d 675, 681 (3d
Cir. 2012) (citing Iqbal, 556 U.S. at 678–79; Twombly, 550 U.S. at 555–57;
Burtch v. Milberg Factors, Inc., 662 F.3d 212, 220-21 (3d Cir. 2011)).
As the United States Court of Appeals for the Third Circuit has observed:
The Supreme Court in Twombly set forth the “plausibility” standard
for overcoming a motion to dismiss and refined this approach in Iqbal.
The plausibility standard requires the complaint to allege “enough
facts to state a claim to relief that is plausible on its face.” Twombly,
550 U.S. at 570, 127 S. Ct. 1955. A complaint satisfies the plausibility
standard when the factual pleadings “allow[ ] the court to draw the
reasonable inference that the defendant is liable for the misconduct
alleged.” Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 556,
127 S. Ct. 1955). This standard requires showing “more than a sheer
possibility that a defendant has acted unlawfully.” Id. A complaint
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which pleads facts “merely consistent with” a defendant's liability, [ ]
“stops short of the line between possibility and plausibility of
‘entitlement of relief.’”
Burtch v. Milberg Factors, Inc., 662 F.3d 212, 220-21 (3d Cir. 2011).
Thus, in assessing a motion to dismiss the court engages in a three-step
analysis:
First, the court must “tak[e] note of the elements a plaintiff must plead
to state a claim.” Iqbal, 129 S. Ct. at 1947. Second, the court should
identify allegations that, “because they are no more than conclusions,
are not entitled to the assumption of truth.” Id. at 1950. Finally,
“where there are well-pleaded factual allegations, a court should
assume their veracity and then determine whether they plausibly give
rise to an entitlement for relief.” Id.
Santiago v. Warminster Tp., 629 F.3d 121, 130 (3d Cir. 2010).
In undertaking this task, the court generally relies only on the complaint,
attached exhibits, and matters of public record. Sands v. McCormick, 502 F.3d
263, 268 (3d Cir. 2007). The court may also consider “undisputedly authentic
document[s] that a defendant attached as an exhibit to a motion to dismiss if the
plaintiff’s claims are based on the [attached] documents.” Pension Benefit Guar.
Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Moreover,
“documents whose contents are alleged in the complaint and whose authenticity no
party questions, but which are not physically attached to the pleading, may be
considered.” Pryor v. Nat’l Collegiate Athletic Ass’n, 288 F.3d 548, 560 (3d Cir.

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2002); see also U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 382, 388 (3d Cir.
2002) (holding that “[a]lthough a district court may not consider matters
extraneous to the pleadings, a document integral to or explicitly relied upon in the
complaint may be considered without converting the motion to dismiss in one for
summary judgment.”) However, the court may not rely on other parts of the record
in determining a motion to dismiss. Jordan v. Fox, Rothschild, O’Brien & Frankel,
20 F.3d 1250, 1261 (3d Cir. 1994).
B.

R.K. as Heir to an Intestate Estate is a Competent Party in This
Mortgage Foreclosure Case But the Parties Will Be Ordered to
Take Appropriate Steps to Protect This Minor’s Interests

As we have noted, this motion to dismiss presents a single narrow issue
relating to the legal competence of R.K., the minor heir to the intestate estate of the
Mortgagor, to serve as the nominal defendant in this foreclosure action. On this
score, defense counsel is to be commended for bringing this issue to our attention,
but we agree that under Pennsylvania law the heir to an intestate estate is a proper
party defendant in a foreclosure action.
At the outset, this conclusion is compelled by Rule 1144 of the Pennsylvania
Rules of Civil Procedure, which identifies proper parties in a mortgage foreclosure
action and provides as follows:
(a) The plaintiff shall name as defendants
(1) the mortgagor;

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(2) the personal representative, heir or devisee of a deceased
mortgagor, if known; and
(3) the real owner of the property, or if the real owner is unknown, the
grantee in the last recorded deed.
(b) Unless named as real owner, neither the mortgagor nor the
personal representative, heir or devisee of the mortgagor, need be
joined as defendant if the plaintiff sets forth in the complaint that the
plaintiff releases such person from liability for the debt secured by the
mortgage
Pa. R.C.P. 1144.
Here, it is undisputed that the Mortgagor is deceased. Thus, under Rule
1144(a)(2), the proper party-defendant is “the personal representative, heir or
devisee of a deceased mortgagor, if known.” Pa. R.C.P. 1144(a)(2). The language
of Rule 1144(a)(2) is cast in the disjunctive. Thus, it appears that either the
personal representative of a deceased mortgagor, or the heir of the mortgagor, may
be named as a defendant.
This conclusion is confirmed by Pennsylvania case law construing this rule,
which consistently seems to recognize that an heir to a deceased mortgage holder is
a proper party in a foreclosure action. See, e.g., Wachovia Mortg., FSB v. Estate of
Battistini, No. 1739 EDA 2013, 2014 WL 10980089, at *1 (Pa. Super. Ct. Feb. 25,
2014); PNC Bank, N.A. v. Unknown Heirs, 2007 PA Super 212, 929 A.2d 219
(2007); Meritor Mortg. Corp.-E. v. Henderson, 421 Pa. Super. 339, 342, 617 A.2d
1323, 1325 (1992). Therefore, we agree that R.K. is a proper nominal party-

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defendant in this case, and will deny the motion to dismiss this case based upon
R.K.’s alleged incapacity to serve as a party-defendant.
We also agree, however, with the overarching concern voiced by defense
counsel in filing this motion, a concern for the protection of the interests of R.K., a
minor child, in this litigation where R.K. simply serves as a nominal partydefendant. We note that the plaintiff shares this concern, and has proposed that a
guardian ad litem be appointed to protect R.K.’s interests.
We commend this approach and note that Rule 17(c) of the Federal Rules of
Civil Procedure specifically contemplates the appointment of a guardian ad litem
in cases involving minors who are parties to litigation. See Fed. R. Civ. P. 17(c).
Moreover, this practice is a routine measure in foreclosure cases of this type, one
which allows the case to proceed forward while protecting the interests of nominal
minor parties. See generally, United States v. Bridgewater, No. CV 2014-0099,
2016 WL 8730567, at *4 (D.V.I. Aug. 26, 2016).
This is the path we will follow in this case, a path which recognizes that
R.K. is a proper party, but sets in motion procedures for protecting this minor
child’s interests from any unintended collateral consequences flowing from
improvident financial decisions by the deceased Mortgagor.
An appropriate order follows.

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III.

Order
For the foregoing reasons IT IS ORDERED as follows:
1.

The defendant’s motion to dismiss (Doc. 7), is DENIED.

2.

Pursuant to Federal Rule of Civil Procedure 17(c), a guardian ad litem

shall be appointed to represent the interests of R.K. in this litigation. The parties
shall meet, confer, and if possible jointly agree upon an appropriate guardian ad
litem to propose to the court on or before January 12, 2018.
3.

The parties shall then file a status report, or appropriate motions

disposing of this action, on or before March 12, 2018.
So ordered this 6th day of December, 2017.

/s/ Martin C. Carlson
Martin C. Carlson
United States Magistrate Judge

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