Almazon v. JPMorgan Chase Bank, N.A.
| Decision Date | 09 March 2020 |
| Docket Number | 19-CV-4871 (VEC) |
| Parties | DOINA ROSU ALMAZON, Plaintiff, v. JPMORGAN CHASE BANK, National Association, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Plaintiff Doina Almazon has spent the past seven years fighting, in state court, to prevent JPMorgan Chase Bank, N.A. (Chase) from foreclosing on her home at 27 Grape Lane in Hicksville, New York (the Property). Notwithstanding her vigorous efforts, the New York Supreme Court, Nassau County (Nassau County Supreme Court) issued a foreclosure judgment (the Judgment) on December 14, 2018. Dkt. 8-22. Thereafter, Plaintiff filed an appeal, followed by a motion to the trial court to reconsider its underlying summary judgment decision and an emergency application for a temporary restraining order (TRO) against any foreclosure sale of the Property. Dkts. 8-20 to 8-23. On August 29, 2019, the trial court denied her reconsideration and TRO motions; her appeals remain pending in state court. Dkt. 42-5.
Plaintiff filed this action while her motions for reconsideration were pending in state court, seeking to re-litigate many of the issues that she unsuccessfully raised in the foreclosure proceeding. The Complaint (Dkt. 1), filed pro se, alleges ten causes of action and seeks damages for Chase's alleged foreclosure-related misconduct, as well as a declaration that the bank has no "title, lien, or interest in or to" the Property. Compl. at 18.
Defendant moved to dismiss the Complaint in its entirety for lack of subject matter jurisdiction, or, in the alternative, for failure to state a claim upon which relief can be granted. Dkt. 7. In her opposition memorandum ("Opp. Mem.")—filed by an attorney temporarily engaged for that purpose—Almazon withdrew four of the ten claims, leaving for disposition her federal claims under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et seq. and the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq. and her state law claims for intentional infliction of emotional distress (IIED), breach of the implied covenant of good faith and fair dealing, conversion, and deceptive business practices in violation of N.Y. Gen. Bus. Law (GBL) § 349. See Opp. Mem. (Dkt. 22) at 14 n.11. Thereafter, Plaintiff filed a proposed Amended Complaint (Dkt. 34-1), augmenting her factual allegations, converting her RESPA claim into a damages claim for "dual tracking," and adding a new claim, pursuant to 42 U.S.C. § 1983, which alleges that Chase deprived her of procedural due process during the state court proceedings.
For the reasons that follow, Plaintiff's claims for declaratory relief are dismissed for lack of subject-matter jurisdiction; her damages claims are dismissed because they are barred by res judicata. Leave to amend is denied as futile because her proposed amended claims are similarly defective and fail to state claims upon which relief can be granted.
On or about December 21, 2000, Plaintiff executed a mortgage on the Property in favor of Flagstar Bank to secure a loan of $232,000. Compl. ¶¶ 1, 32; see also Declaration of Boris Peyzner (Peyzner Decl.) (Dkt. 8) Ex. A at 17-27.3 A few years later, Almazon executed a second mortgage to Chase in the amount of $54,366.51. Compl. ¶ 6; Peyzner Decl. Ex. A at 34-52. The two mortgages were ultimately consolidated into a single mortgage in favor of Chase, in the amount of $275,650 (Consolidation, Extension, and Modification Agreement or "CEMA"). Compl. ¶¶ 5-7; Peyzner Decl. Ex. A at 54-79.
Sometime in late 2010, Plaintiff petitioned Chase for a modification to the CEMA; she was experiencing "severe financial hardship" and qualified for a federal loan modification program known as the Home Affordable Modification Program (HAMP). Compl. ¶¶ 9, 11. According to Almazon, however, Chase never initiated the "internal steps necessary" for her to be approved for relief under that program. Id. ¶ 11. During the pendency of her request for a HAMP modification, Plaintiff attempted to make partial payments on her mortgage, but Chaserejected those payments, "thereby creating further delinquency and negatively impacting her credit and account status." Id. ¶ 10.
Despite Almazon's reported requests to "modify the loan for the CEMA," Chase allegedly failed to provide her with "guidance letters as typically required under both Federal and State Law," made "contradictory and misleading statements," gave her "only partial information despite repeated requests for formal documentation," lost her modification paperwork sixteen times, and failed to explain "the workings of any modified loan transaction." Id. ¶¶ 19-21. According to Plaintiff, Chase "knowingly and intentionally" made "it impossible for Plaintiff to successfully negotiate terms for a successful loan transaction and modification" and did so "with the explicit purpose . . . of taking possession of Plaintiff's Property." Id. ¶¶ 31-32.
On October 29, 2012, Hurricane Sandy4 "severely damaged" the Property, forcing Plaintiff to live elsewhere and making it "impossible" for her to "pay her mortgage without modification." Compl. ¶¶ 14-15. As a result of the storm damage to her property, Plaintiff was entitled to receive from some unspecified source more than $94,000; those funds were held by Chase during the repair process. Id. ¶¶ 16-17. According to Plaintiff, Chase wrongfully refused to release those funds to her. Id. ¶¶ 17-18.
On January 15, 2013, acting through the law firm of Fein, Such & Crane, LLP (the Firm), Chase initiated foreclosure on the property by filing a summons, complaint, and notice of pendency (also known as a lis pendens) in the Nassau County Supreme Court (the ForeclosureAction).5 Compl. ¶¶ 25-26; Peyzner Decl. Ex. A at 2 (summons); id. at 6 (state court complaint); Peyzner Decl. Ex. D at 52 (notice of pendency). According to Plaintiff, the Firm filed the litigation without first providing her with various disclosures allegedly required by state and Federal law. Compl. ¶¶ 27-28. Plaintiff also complains that Chase wrongfully commenced the Foreclosure Action while her request for a loan modification was pending. Id. ¶ 13.
At some point after the Foreclosure Action was filed, Chase engaged the services of Safeguard Properties, LLC (Safeguard). Id. ¶ 13. In or about April 2018, Safeguard entered the Property, changed the locks, and removed Plaintiff's shed, destroying it and its contents. Id. ¶¶ 13, 22.
Many of the claims that Plaintiff raises in this Court were first raised in the Foreclosure Action. Peyzner Decl. Ex. B (State Court Answer). In her answer and counterclaim (filed by counsel), Almazon interposed eighteen affirmative defenses, including:
In addition, Almazon asserted six counterclaims, including: for "false implied promise of a modification," id. ¶¶ 116-22; for "misleading representations by [Chase] to obtain partial payments," id. ¶¶ 123-25; for improperly commencing the Foreclosure Action "during active modification negotiations," id. ¶¶ 126-29; and for violation of GBL § 349. Id. ¶¶ 136-37. Plaintiff also repeatedly complained that Chase was unlawfully withholding Hurricane Sandy funds. See, e.g., Peyzner Decl. Ex. D (Dkts. 8-6 at 115-17) (affidavit in support of request for TRO); Peyzner Decl. Ex. P at 5 ().
From November 27, 2013, through March 2017, the parties engaged in efforts to settle, in addition to litigating Almazon's unsuccessful requests for a stay and a TRO. See Peyzner Decl. Ex. D (Dkt. 8-6 at 113, 146-53); Chinta Decl. Ex. 21, ¶ 8. On June 15, 2017, Chase moved for summary judgment. Peyzner Decl. Ex. D (Dkt. 8-5 at 5-6). Its moving papers noted that Almazon had made no loan payments since February 1, 2010. Peyzner Decl. Ex. D (Dkt. 8-5 at 11) ¶ 13. Chase asserted that it had provided all required pre-litigation warnings and notices, and addressed and controverted each of Plaintiff's defenses and counterclaims. Id. ¶¶ 58-155. On September 18, 2017, after Plaintiff failed to oppose the motion, Justice Adams granted summary judgment in Chase's favor; struck Almazon's answer; dismissed her affirmative defenses and counterclaims with prejudice; and issued an Order of Reference appointing a referee to "ascertain and compute the amount due." Peyzner Decl. Exs. E-F.
Plaintiff appealed to the Appellate Division, Second Department. Peyzner Decl. Ex. H. Because Plaintiff had defaulted in the trial court, Chase moved to dismiss the appeal.6 Almazon failed to oppose Chase's motion. Peyzner Decl. Ex. I. The Appellate Division dismissed the appeal, and the Court of Appeals denied leave to...
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