Ameriprise Bank, FSB v. PNC Bank, Nat'l Ass'n

• Decision Date: 26 November 2012
• Docket Number: Civil Action No. 12-1113
• Parties: AMERIPRISE BANK, FSB, Plaintiff, v. PNC BANK, NATIONAL ASSOCIATION, Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

AMERIPRISE BANK, FSB, Plaintiff,

v.PNC BANK, NATIONAL ASSOCIATION, Defendant.

Civil Action No. 12-1113

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Date: November 26, 2012

Judge Nora Barry Fischer

MEMORANDUM OPINION

I. Introduction

Pending before the Court are an application¹ to confirm an arbitral award filed by the Plaintiff and a motion to dismiss filed by the Defendant. Docket Nos. 1 & 10. For the reasons that follow, the motion to dismiss will be denied. Docket No. 10. The application for an order confirming the award will be granted, and the order proposed by the Plaintiff will be entered. Docket Nos. 1 & 1-1.

II. Background

PNC Bank, National Association ("PNC"), is a national banking association with its principal office in Wilmington, Delaware. Docket No. 1 at ¶ 3. American Express Travel Related Services Company, Inc. ("AMEX Travel"), and American Express Bank, FSB ("AMEX Bank"), are subsidiaries of American Express Company ("American Express"). Id. at ¶ 8, n. 1. Pursuant to agreements with AMEX Travel and AMEX Bank executed on June 26, 2000, and June 30, 2004, PNC originated and serviced home equity lines of credit for AMEX Bank. Id. at 8. Ameriprise Bank, FSB ("Ameriprise"), is a federal savings bank with its principal office in Minneapolis, Minnesota. Id. at ¶ 2. AMEX Bank's loan portfolio was transferred to Ameriprise in 2006. Id. at ¶ 9. The transfer followed the spinoff of Ameriprise's parent company, Ameriprise Financial, Inc., to the shareholders of American Express. Id.

After the spinoff, Ameriprise learned that PNC had committed various errors relating to the origination and servicing of some loans. Id. at ¶ 10. These errors caused Ameriprise to suffer damages. Id. In a letter dated January 12, 2009, Ameriprise demanded that PNC mitigate the resulting damages or indemnify Ameriprise pursuant to the terms of the agreements. Id. at ¶ 11. PNC refused to honor Ameriprise's demand. Id.

The agreements specified that disputes arising thereunder were to be arbitrated before the American Arbitration Association ("AAA"). Id. at ¶ 12. Ameriprise initiated arbitration proceedings against PNC on July 23, 2009. Id. at ¶ 13. A commercial arbitration tribunal consisting of three members was convened to consider Ameriprise's claims. Docket No. 1-7 at 2-8. The tribunal received evidence pertaining to alleged mistakes involving forty-six different loans. Id. at 2. Ameriprise's claims concerning thirty-seven of the loans were denied. Id. at 5. The tribunal awarded Ameriprise a total of $443,863.48 for servicing errors involving eight of the remaining nine loans.² Id. at 4-5. Ameriprise was instructed to assign its rights under those loans to PNC upon receipt of the amounts awarded. Id. at 5.

The outstanding claim asserted by Ameriprise stemmed from mistakes connected to a loan issued to Denise Workman ("Workman") on October 13, 2004. Docket No. 1 at ¶ 6. The claim had "an estimated value of not less than $100,283.15, excluding interest and costs." Id. In the portion of its decision discussing that loan, the tribunal stated:

With respect to the Workman Loan, should the origination error of misidentifying the property result in a claim against Ameriprise for refund of the amount received, PNC, upon notice from Ameriprise shall undertake any necessary defense and indemnification of Ameriprise.

Docket No. 1-7 at 5. No monetary award was provided for the mistake involving that loan.

In a letter dated May 1, 2012, Ameriprise informed PNC that it had decided not to assign its rights under one of the eight loans for which damages had been awarded. Docket No. 1-8 at 2. PNC was relieved of its obligation to pay the award connected with that loan, which was equal to $72,376.19. Id. Ameriprise requested that PNC pay the remaining $371,487.29 that had been awarded by the tribunal. Id. at 3. In addition, Ameriprise expressed its intention "to memorialize PNC's indemnification obligation with respect to the Workman loan" by seeking confirmation of the tribunal's award. Id. at 2. On May 15, 2012, PNC paid Ameriprise $371,487.29 to satisfy its monetary obligations under the tribunal's decision. Docket No. 1 at ¶ 18. Ameriprise's rights under the seven loans for which payments had been made were assigned to PNC. Id.

Ameriprise commenced this action on August 7, 2012, seeking confirmation of PNC's obligations under the arbitral award pertaining to the loan issued to Workman. Id. at ¶ 6. On September 6, 2012, PNC moved for the dismissal of this action pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).³ Docket No. 10. Ameriprise's application for confirmation and PNC's motion to dismiss will both be addressed in this memorandum opinion.

III. Standards of Review

A motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(1) challenges a court's subject-matter jurisdiction over the plaintiff's claims. FED. R. CIV. P. 12(b)(1). "Atissue in a Rule 12(b)(1) motion is the court's 'very power to hear the case.'" Judkins v. HT Window Fashions Corp., 514 F.Supp.2d 753, 759 (W.D.Pa. 2007), quoting Mortensen v. First Federal Savings & Loan Association, 549 F.2d 884, 891 (3d Cir. 1977). As the party asserting that jurisdiction exists, the plaintiff bears the burden of showing that his or her claims are properly before the court. Development Finance Corp. v. Alpha Housing & Health Care, 54 F.3d 156, 158 (3d Cir. 1995). In reviewing a Rule 12(b)(1) motion, a court must determine whether the attack on its jurisdiction is a facial attack or a factual attack. A facial attack challenges the sufficiency of the plaintiff's pleadings on jurisdictional grounds. Petruska v. Gannon University, 462 F.3d 294, 302, n. 3 (3d Cir. 2006). When considering a facial attack, a court must accept the allegations contained in the plaintiff's complaint as true. Id. A factual attack on the court's jurisdiction must be treated differently. Id. When considering a factual attack, the court does not attach a presumption of truthfulness to the plaintiff's allegations, and the existence of disputed material facts does not preclude the court from deciding for itself whether jurisdiction over the plaintiff's claims can be properly exercised. Mortensen, 549 F.2d at 891.

In light of the United States Supreme Court's decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), a complaint may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) if it does not allege "enough facts to state a claim to relief that is plausible on its face." Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008), quoting Twombly, 550 U.S. at 570. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). This standard requires more than "a formulaic recitation of the elements ofa cause of action." Twombly, 550 U.S. at 555. The complaint must allege a sufficient number of facts "to raise a right to relief above the speculative level." Id. This requirement is designed to facilitate the notice-pleading standard of Federal Rule of Civil Procedure 8(a)(2), which requires "a short and plain statement of [a] claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2)(emphasis added).

In considering a motion to dismiss filed pursuant to Rule 12(b)(6), a court accepts all of the plaintiff's allegations as true and views all reasonable inferences drawn from those allegations in the light most favorable to the plaintiff. Buck v. Hampton Township School District, 452 F.3d 256, 260 (3d Cir. 2006). Nonetheless, a court need not credit bald assertions, unwarranted inferences, or legal conclusions cast in the form of factual averments. Morse v. Lower Merion School District, 132 F.3d 902, 906, n. 8 (3d Cir. 1997). The primary question in deciding a motion to dismiss is not whether the plaintiff will ultimately prevail, but rather whether he or she is entitled to offer evidence to establish the facts alleged in the complaint. Maio v. Aetna, 221 F.3d 472, 482 (3d Cir. 2000). The purpose of a motion to dismiss is to "streamline[] litigation by dispensing with needless discovery and factfinding." Neitzke v. Williams, 490 U.S. 319, 326-327, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989). In addition to the allegations contained in the complaint, a court may consider matters of public record, exhibits attached to the complaint, and other items appearing in the record of the case. Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384, n. 2 (3d Cir. 1994).

IV. Discussion

This matter is before the Court pursuant to the Federal Arbitration Act ("FAA") [9 U.S.C. § 1 et seq.]. Section 2 of the FAA provides that "[a] written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration acontroversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."⁴ 9 U.S.C. § 2. The United States Supreme Court has construed the phrase "involving commerce" broadly enough to extend the FAA's reach to the limits of Congress' power under the Commerce Clause.⁵ Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265, 268-277, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). The Supreme Court has also interpreted the phrase "evidencing a transaction" to reach contracts concerning transactions that turn out to affect interstate commerce "in fact," even if the parties to those contracts "did not contemplate an interstate commerce...