Marino v. Bank of America Home Loans et al
Filing
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OPINION AND ORDER granting 42 Motion for Order Setting Rule 12 Deadline; granting in part and denying in part 43 Motion to Dismiss for Failure to State a Claim. Plaintiff may file a motion to amend that complies with the Local Rules, including a red-lined copy of a proposed Third Amended Complaint, for the Courts consideration. Signed by Judge William K. Sessions III on 12/10/2013. (law)
UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT
VERA GRETCHYN MARINO,
Plaintiff,
v.
BANK OF AMERICA HOME
LOANS, BANK OF AMERICA
CORPORATION, individually
and as successor to the
interests, credits and
liabilities of COUNTRY
WIDE HOME LOANS, INC.,
Defendants.
VERA GRETCHYN MARINO,
Plaintiff,
v.
COUNTRY WIDE HOME LOANS,
INC. and BANK OF AMERICA
HOME LOANS and BANK OF
AMERICA CORPORATION,
interests, credits and
liabilities of COUNTRY
WIDE HOME LOANS, INC.,
Defendants.
VERA GRETCHYN MARINO,
Plaintiff,
v.
GREEN TREE SERVICING, LLC,
Defendant.
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Case No. 2:11-cv-241
(lead case)
Case No. 2:11-cv-243
Case No. 2:13-cv-72
OPINION AND ORDER
(Docs. 42, 43)
Plaintiff Vera Gretchyn Marino, proceeding pro se,
brings this consolidated action against Defendants
Countrywide Home Loans, Inc. (“Countrywide”), Bank of
America, N.A. and Bank of America Corporation (“Bank of
America”), and Green Tree Servicing, L.L.C. (“Green Tree”),
alleging that she was defrauded into refinancing her home.
Defendant Green Tree now moves to dismiss for failure to
state a claim.
For the reasons set forth below, the motion
to dismiss is GRANTED in part and DENIED in part.
Factual Background
Marino has owned a home in Winhall, Vermont for
approximately forty-five years.
The original mortgage on
the property was paid off in or about 1980.
Beginning in
September 2005, Marino was solicited by two Countrywide
agents, Mark Memmelo and Steve Da Silva, to take out a new
mortgage.
Memmelo allegedly told Marino that “the money in
her home was doing nothing for her,” and that she could “put
that equity money to use for her security in her senior
years.”
(Doc. 27 at 7.)
Memmelo also allegedly informed
Marino that any commission due to him or Countrywide would
not be charged to her, assured her that he was trustworthy,
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and told her that he “had her financial interests at heart.”
Id.
Marino was sixty-seven years old at the time.
On September 13, 2005, Memmelo told Marino that the
interest rate on the new loan would be, at worst, 5.8%.
At
Memmelo’s request, the home was appraised and the reported
value was $610,000.
Memmelo then informed Marino that he
could write a loan in the amount of approximately $350,000
to $375,000.
Marino subsequently asked Memmelo’s opinion about using
the proceeds from the loan to purchase a condominium in New
York City.
Memmelo allegedly responded: “That’s a great
idea, that’s a hot market, that’s good, but let’s not tell
anyone about that.”
Id. at 8.
On October 4, 2005, Marino received a document from
Countrywide’s Edwin Marini, with whom she had not had any
prior contact, informing her she was applying for a loan
with an interest rate that exceeded the “Declared Rate” by
3%, and for which the lender would charge more than four
points.
The notice from Marini did not specify either the
actual interest rate or the number of points on the loan.
That same day, Marino received a second document from
Trinidad Blanchet, stating that the loan amount would be
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$360,000, with a discount fee of $900 and an interest rate
of 9.75%, discounted .25%, with a monthly payment of $2,925
for principal and interest.
When Marino read the terms of the loan she called
Memmelo, who allegedly assured her “not to worry, that this
is a formality only[.
D]idn’t I tell you that the worst
case would be around 5 or 6%, and don’t forget, there are no
points[] charged to you.”
Id. at 8-9.
Memmelo also
allegedly assured Marino that the documents she had received
were a “screw up,” but urged her to sign the document sent
by Edwin Marini.
Id. at 9.
Marino signed the document as
requested.
On October 5, 2005, Marino signed a contract to
purchase a condominium in New York City.
The down payment
on the condominium was $95,000, with a purchase price of
$950,000.
Under the terms of the deal, Marino forfeited her
down payment if the transaction did not close by November
30, 2005.
Marino claims that the interest rate on her Vermont
refinancing “came to be 10% on October 6, 2005, the date of
closing of this loan with Countrywide.”
Id. at 10.
Facing
the potential of forfeiting the down payment on the New York
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City property if she did not receive funds from Countrywide,
Marino closed on the Vermont refinancing.
The Second
Amended Complaint alleges that because of the stress of
these events, Marino suffered a “coronary occlusion” within
eleven days of the transaction.
The condition required
emergency surgery, and has since resulted in “coronary
sequellae . . . , uncontrolled hypertension and acute
emotional distress.”
Id. at 11.
Marino reports that although Memmelo assured her that
New York City was a “hot market,” and that a condominium
there would rise in value, the condominium was sold in June
2011 at a considerable loss.
As of 2012, Marino was unable
to continue the payments on her Vermont home.
Marino further alleges that from 2004 through 2008,
officers and directors at Countrywide conspired to
embark upon a secret corporate strategy and plan,
on a national scale, to maximize the number of
mortgages, by refinance or otherwise, that it sold
to the public at large, by directing and/or
encouraging, through its agents, servants and/or
employees, supervisors and team leaders, which
included Mr. Memmelo and Mr. DaSilva, to sell as
many of its loans as possible by ‘steering’ and
‘encouraging’ people into loan contracts, with
whatever words, opinions, projections,
representations or statements it took, even if
such words, opinions, projections, representations
or statements, were wild, patently speculative,
[or] untrue . . . .
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Id. at 13.
The “ultimate purpose” of this conspiracy,
Marino claims, was “to bundle and sell these loans as
securities . . . to the world market.”
Id. at 14.
Marino
alleges that her loan was a result of this broad conspiracy
to defraud homeowners.
This case is comprised of three consolidated actions,
the third of which was brought against Defendant Green Tree.
Marino alleges that after she filed the first of the
consolidated cases, “Bank of America[] transferred and/or
sold this said loan and/or its servicing to Green Tree, for
unknown consideration.”
(Doc. 35-2 at 4.)
She further
claims that Bank of America “either negligently or
intentionally, omitted to inform Green Tree of the ongoing
litigation between plaintiff and defendants.”
Id.
Marino’s
claim against Green Tree is that “by acceptance of
ownership, servicing and/or responsibility for collection”
of the loan, Green Tree “accepted responsibility to the
plaintiff, as a victim of Countrywide, for the restitution
of her losses, and all damages, and other requested relief .
. . in the previously pending action.”
Id. at 5.
In
addition to damages, Marino asks the Court to enjoin Green
Tree from either pursuing a foreclosure or “collect[ing] any
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sums from the plaintiff,” and for declaratory relief with
respect to both her own mortgage and the validity of the
agreement between Bank of America and Green Tree.
Id.
Green Tree now moves to dismiss, arguing that Marino
has failed to allege that it engaged in any actionable
conduct.
Green Tree also argues that Marino has no standing
to challenge the validity of its agreement with Bank of
America.
The motion to dismiss is submitted pursuant to
Federal Rule of Civil Procedure 12(b)(6).
Discussion
I.
Rule 12(b)(6) Legal Standard
When ruling on a motion to dismiss pursuant to Rule
12(b)(6), the Court must accept all factual allegations in
the Complaint as true and draw all reasonable inferences in
the plaintiff’s favor.
Famous Horse Inc. v. 5th Avenue
Photo Inc., 624 F.3d 106, 108 (2d Cir. 2010).
However, the
Court is not required to credit “mere conclusory statements”
or “[t]hreadbare recitals of the elements of a cause of
action.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007)).
“To survive a motion to dismiss, a complaint must
contain sufficient factual matter . . . to ‘state a claim to
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relief that is plausible on its face.’”
Id. (quoting
Twombly, 550 U.S. at 570).
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.”
Id. (citing Twombly, 550 U.S. at 556).
More specifically, the plaintiff must allege sufficient
facts to show “more than a sheer possibility that a
defendant has acted unlawfully.”
Id.
If the plaintiff has
not “nudged [her] claims across the line from conceivable to
plausible, [the] complaint must be dismissed.”
Twombly, 550
U.S. at 570; see Iqbal, 556 U.S. at 680.
In ruling on a motion to dismiss pursuant to Rule
12(b)(6), a district court must ordinarily construe a pro se
complaint liberally, see Hill v. Curcione, 657 F.3d 116, 122
(2d Cir. 2011), and interpret the claims as raising the
strongest arguments that they suggest.
Triestman v. Fed.
Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006).
In
this case, however, the plaintiff is an attorney who has
practiced for many years in personal injury and general
practice law.
(Doc. 19 at 5.)
Consequently, she does not
receive “the special consideration which the courts
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customarily grant to the pro se parties.”
Harbulak v.
County of Suffolk, 654 F.2d 194, 198 (2d Cir. 1981); see
also Holtz v. Rockefeller & Co., 258 F.3d 62, 82 n.4 (2d
Cir. 2001).
II. Green Tree’s Potential Liability
The claims in this case center upon the conduct of
Countrywide agents or employees during the loan’s
origination.
Green Tree asserts that it is merely the loan
servicer, and that it has no liability for conduct that
occurred during the origination of the loan.
The facts
alleged in the Second Amended Complaint, however, contend
that Green Tree is more than just the servicer, and may in
fact be the owner of the loan.
As such, Green Tree is
alleged to have assumed responsibility for providing Marino
all of her requested relief, including damages.
The distinction between the servicer of a loan and the
owner of a loan is significant.
The case law indicates that
when purchasing a loan, parties may specifically contemplate
whether or not the buyer is assuming the liabilities
connected to the loan.
See, e.g., Argueta v. J.P. Morgan
Chase, 787 F. Supp. 2d 1099, 1103 n.3 (E.D. Cal. 2011);
Carnero v. Federal Home Loan Mortgage Corp., 2012 WL 177560,
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at *4 (N.D. Cal. Jan. 23, 2012).
The federal code also
distinguishes between owners and servicers when assigning
liability.
See, e.g., 15 U.S.C. § 1641(f)(1) (exempting
servicers from liability under the Truth in Lending Act
“unless the servicer is or was the owner of the
obligation”).
Accordingly, a fundamental question at this
early stage in the case is whether Marino has set forth a
plausible claim that Green Tree owns the loan and may
therefore be liable for damages arising out of its
origination.
Marino’s pleading alleges that Bank of America
“transferred and/or sold this loan and/or its servicing to
Green Tree.”
(Doc. 35-2 at 4.)
Marino subsequently states
that Green Tree may be servicing the mortgage on its own
behalf, or on behalf of Countrywide, Bank of America, or
“CWABS, Inc., Asset-Backed Certificates Trust 2005-13.”
Id.
Accordingly, the claim against Green Tree presents the
possibility that it is more than the servicer, and that it
may also be the owner of the loan.
Green Tree asserts in its opposition memorandum that it
is solely the loan servicer, and argues that Marino’s
factual allegations support this assertion.
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With respect to
Marino’s claim that Bank of America may have sold the loan,
Green Tree argues that “[t]o the contrary, Plaintiff
acknowledges that Green Tree communicated to her that it
‘service[d] . . . this mortgage . . . on behalf of an entity
identified by Green Tree as ‘CWABS, Inc., Asset-Backed
Certificates Trust 2005-13,’” and that she thus “did not –
and cannot – allege that Green Tree is anything more than
her mortgage loan service.”
(Doc. 46 at 3.)
This argument
reads Marino’s allegations too narrowly, as she pleads in
the alternative that Green Tree may, in fact, be the owner
of the loan and servicing it on its own behalf.
Such
alternative pleading is permitted by the Federal Rules of
Civil Procedure.
See Fed. R. Civ. P. 8(d)(2)-(3)
(permitting pleading “hypothetically” and the assertion of
“Inconsistent Claims or Defenses”); see also Padre Shipping,
Inc. v. Yong He Shipping, 553 F. Supp. 2d 328, 333 (S.D.N.Y.
2008) (“plaintiffs are allowed to assert inconsistent facts
in support of alternative claims, and courts may not
construe allegations regarding one claim to be an admission
against another”) (citation omitted).
As discussed above, the legal standards for a Rule
12(b)(6) motion require the Court to accept all factual
11
allegations in the Complaint as true and draw all reasonable
inferences in the plaintiff’s favor.
F.3d at 108.
Famous Horse Inc., 624
Consequently, at this stage in the case, the
Court must accept Marino’s assertion that Green Tree may be
the owner of the loan, and that it may have accepted
responsibility for her damages and any other forms of relief
the Court may grant.
Green Tree’s motion to dismiss all
claims against it is therefore DENIED.
III.
Green Tree’s Contract With Bank of America
Marino contends that Green Tree’s “acquisition of the
subject loan from Bank of America, is void or voidable
because” Bank of America “either negligently or
intentionally concealed” the fact that the loan was the
subject of litigation.
(Doc. 35-2 at 5-6.)
Green Tree
moves for dismissal of this claim, arguing that Marino has
no standing to challenge the validity of its agreement with
Bank of America, and that even assuming standing, the
failure to inform did not render the contract void or
voidable.
Green Tree also argues that Marino has not
alleged fraud with sufficient particularity.
Marino’s
opposition memorandum does not specifically address these
arguments.
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The issue of standing is a threshold jurisdictional
issue, which a federal court must entertain before reaching
the merits of the case.
Ross ex rel. Dunham v. Lantz, 408
F.3d 121, 123 (2d Cir. 2005).
Here, Green Tree relies upon
the “longstanding contract-law principle . . . that a
plaintiff who is not a party to a contract does not have
standing to challenge” the validity of the contract.
Dernier v. Mortgage Network, Inc., 2013 VT 96, ¶ 28 (citing
Bischoff v. Bletz, 2008 VT 16, ¶ 16; Bryant v. Strong, 448
A.2d 142, 143 n.1 (Vt. 1982); 13 S. Williston & R. Lord, A
Treatise on the Law of Contracts § 37:1, at 5 (4th ed.
2000)).
There is a well-established exception to this
general rule where the challenging party is an intended
third-party beneficiary to the contract.
See, e.g., Hedges
v. Durrance, 834 A.2d 1, 4 (Vt. 2003).
There is no indication in the pleadings that Marino was
an intended beneficiary of any contract between Bank of
America and Green Tree.
The Vermont Supreme Court recently
held, however, that “a debtor may challenge the assignment
of his or her debt if it is void or entirely ineffective —
even if that means allowing a ‘stranger to a contract’ to
assert reasons related to the breach of that contract.”
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Dernier, 2013 VT 96, ¶ 28.
Such standing is limited to a
challenge that would render the assignment entirely
ineffective or void.
Id.
The Vermont Supreme Court determined in Dernier that
because the Uniform Commercial Code permits a debtor to
challenge the transfer of a “lost or stolen” loan
instrument, the plaintiff/debtor had standing to challenge
the transfer of a note and mortgage that, he alleged, was
fraudulently obtained by the transferee.
Id. at ¶ 53.
The
instant case is distinguishable, as Marino alleges fraud on
the part of the transferor, Bank of America, and there is no
claim that Green Tree “stole” the note and mortgage.
Nor
has Marino cited any other basis, in the Uniform Commercial
Code or otherwise, for her standing to challenge the
transfer from Bank of American to Green Tree.
A party invoking jurisdiction of a federal court “bears
the burden of showing that [s]he has standing for each type
of relief sought.”
488, 493 (2009).
Summers v. Earth Island Inst., 555 U.S.
Here, Marino has not opposed Green Tree’s
standing argument, and has not carried her burden of
demonstrating her standing to challenge the agreement
between Green Tree and Bank of America.
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The motion to
dismiss this claim is therefore GRANTED.
IV. Declaratory Relief
Green Tree’s final argument is that Marino is not
entitled to declaratory relief because without a pending
foreclosure proceeding, any statement as to the parties’
respective rights would be premature.
The Vermont Supreme
Court addressed this same question in Dernier, and based
upon the limited record before it, concluded that
declaratory relief was not premature.
After noting that
Vermont follows “the case-or-controversy requirement of the
federal courts,” the Dernier court reasoned that
[t]his case has reached the point of a clear
controversy between the parties. Plaintiffs are
obligated to make payments over time, and
defendant’s agent has declared them to be in
default. We can infer, for purposes of this
motion to dismiss, that the agent has accelerated
the note requiring plaintiffs to pay the entire
amount to avoid an adverse judgment and probably
foreclosure. Its letter indicates that it is
assessing late charges because of plaintiffs’
failure of timely payment.
2013 VT 96, ¶ 41.
Based upon Marino’s allegation that since
2012 she has been unable to continue payments on her
mortgage, this Court can similarly infer that a live
controversy exists among the parties.
The Rule 12(b)(6)
motion to dismiss Marino’s request for declaratory relief as
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premature is therefore DENIED.
V.
Leave to Amend
In the final sentence of her opposition memorandum,
Marino asks that the Court deny Green Tree’s motion to
dismiss, or in the alternative grant leave to amend.
Although the Court is denying the bulk of Green Tree’s
motion, Marino may wish to amend to establish her standing
to challenge the agreement between Bank of America and Green
Tree.
This Court’s Local Rules require that a motion to
amend be accompanied by a red-lined version of the proposed
pleading.
See L.R. 15(a).
Accordingly, Marino may file a
motion to amend that complies with the Local Rules,
including a red-lined copy of a proposed Third Amended
Complaint, for the Court’s consideration.
VI. Motion for a Rule 12 Deadline
Green Tree’s second motion before the Court is a
request for a Rule 12 filing deadline.
Green Tree moves the
Court to set the Rule 12 deadline for fourteen days after
Green Tree filed its acceptance of service.
The pending
motion to dismiss was filed within that deadline.
The
motion to set a Rule 12 deadline is GRANTED, and Green
Tree’s motion to dismiss was timely filed.
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Conclusion
For the reasons set forth above, Green Tree’s motion to
dismiss (Doc. 43) is GRANTED in part and DENIED in part, and
its motion for an order setting a Rule 12 deadline (Doc. 42)
is GRANTED.
Dated at Burlington, in the District of Vermont, this
10th day of December, 2013.
/s/ William K. Sessions III
William K. Sessions III
Judge, United States District Court
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