Angeloff v. Deardorff
| Decision Date | 23 November 2010 |
| Docket Number | Civil Action No. 1:09-CV-2169 |
| Parties | DANIEL K. ANGELOFF, et al., Plaintiffs v. JAMES E. DEARDORFF, JR., et al., Defendants |
| Court | U.S. District Court — Middle District of Pennsylvania |
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
Date: November 23, 2010
Pending before the Court are Defendant Wells Fargo's motion to dismiss and brief in support. (Doc. Nos. 54, 55.) For the reasons that follow, the Court will grant Defendant's motion to dismiss.
In July 2008, Plaintiffs were facing a sheriff's sale of their home located in Enola, Pennsylvania. (Doc. No. 40 ¶ 18.) Defendants James Deardorff and Joanne Seeley ran a program which offered "consumer credit counseling" and ways to prevent a sheriff's sale of a home ("the Program"). (Id. ¶ 20.) In response to flyers and other solicitations regarding the Program, Plaintiffs met with Seeley and Deardorff on July 17, 2008. (Id. ¶ 24.) Plaintiffs agreed to enter the Program, and on August 14, 2008, Plaintiffs met with Seeley and Deardorff for a settlement conference. (Id. ¶¶ 26, 35.) Plaintiffs believed they were "transferring their equity to someone else so that they would receive money to take care of their bills, that they would receive credit counseling to assist them and that they would remain in ownership of their home." (Id. ¶ 43.) Instead, Plaintiffs signed over a deed to Joseph Topper. (Doc. No. 1-5.) The deed stated that Plaintiffs received $184,000 in consideration. (Id.) Topper entered into a mortgage loan with Wells Fargo for $166,410 to purchase the property from Plaintiffs. (Doc. No. 1-6.) Although the settlement statement indicated that Plaintiffs were due $101,905.86 in cash from the sale, Plaintiffs received only $1,200 and were given a $9,546 credit. (Doc. No. 40 ¶ 46.) The remaining moneys were withheld by Seeley and Deardorff. (Id. ¶ 47.)
Also on August 14, 2008, Plaintiffs entered into an "Installment Contract" with Topper. (Doc. No. 1-9.) According to the contract, Plaintiffs agreed to make scheduled payments to Topper, Seeley, or Deardorff. (Id. ¶¶ 50, 51; Doc. No. 1-9.) Plaintiffs missed a payment on January 1, 2009, and on January 14, 2009 Seeley gave Plaintiffs notice to leave the premises. (Doc. No. 40 ¶ 53.) Plaintiffs continue to reside at the home, and Wells Fargo is continuing foreclosure proceedings on the property. (Id. ¶ 63.)
Plaintiffs filed a complaint in this action on November 5, 2009. (Doc. No. 1.) On June 14, 2010, Plaintiffs filed an amended complaint, alleging eight causes of action against Wells Fargo. (Doc. No. 40.) On August 16, 2010, Wells Fargo filed the present motion to dismiss Plaintiffs' amended complaint (Doc. No. 54) and a brief in support (Doc. No. 55). In response, Plaintiffs have filed a one-page reply which states in full, "The paragraph calls for a conclusion of law for which no response is necessary." (Doc. No. 58 at 1.) Plaintiffs have filed no further response.
In analyzing a complaint under Rule 12(b)(6), "courts accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). The plaintiff still must provide more than a formulaic recitation of a claim's elements that amounts to mere labels and conclusions. Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964-65 (2007). Additionally, the complaint's "factual allegations must be enough to raise a right to relief above the speculative level." Id.. This does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Phillips, 515 F.3d at 234 (internal quotations and citations omitted).
Wells Fargo claims that for each count asserted against it, Plaintiffs have failed to plead sufficient facts to state a claim for relief. The Court will address each count against Wells Fargo in turn.
In Count 1, Plaintiffs allege that Wells Fargo violated 42 U.S.C. § 1983 because it deprived Plaintiffs of their property rights in violation of the Fourteenth Amendment. (Doc. No. 40 ¶ 68.) To state a claim under § 1983, Plaintiffs must establish two jurisdictional requisites. Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 946 (1982). First, Plaintiffs must allege a violation of a right "secured by the Constitution and laws of the United States." Id. Second, Plaintiffs must show that the alleged deprivation was caused by a person acting under color of state law. Id. Wells Fargo contends that Plaintiffs' federal due process claim must fail because a mortgage foreclosure action is not state action for purposes of a § 1983 claim. (Doc. No. 55 at 8.) The Court agrees.
Plaintiffs complaint does not assert that Wells Fargo was acting under color of state law. Additionally, many courts have recognized that a private lender's actions during foreclosure proceedings cannot constitute state action in violation of § 1983 or the Fourteenth Amendment. See Jacobowitz v. M&T Mortg. Corp., 372 F. App'x 225, 227 (3d Cir. 2010) (); Earnest v. Lowentritt, 690 F.2d 1198, 1201-02 (5th Cir. 1982) () (citations omitted); Zebrowski v. Wells Fargo Bank, N.A., 657 F. Supp. 2d 511, 522 (D.N.J. 2009) (). Because Plaintiffs have not alleged any facts suggesting that Wells Fargo deprived Plaintiffs of due process while acting under color of state law, Count 1 fails against Wells Fargo.
Plaintiffs' claim for violations of the Pennsylvania Constitution also fails. In Count 2, it appears that Plaintiffs are attempting to assert a state due process claim, alleging only that "Wells Fargo's action to use Pennsylvania Law to deprive Plaintiff of their property is due under the color of state law" and "Wells Fargo has not given Plaintiff proper notice, due process, and the ability to be heard on these claims." (Doc. No. 40 ¶¶ 74, 75 [sic]2.) These conclusory statements are insufficient to state a claim for relief. As with the § 1983 claim, Plaintiffs fail to make any allegations suggesting that Wells Fargo was acting under color of state law. Additionally, Plaintiffs seek only monetary damages for the alleged violation of the Pennsylvania Constitution. However, there is no private cause of action for damages arising out of the Pennsylvania Constitution. See Jones v. City of Philadelphia, 890 A.2d 1188, 1208, 1215-16 (Pa. Commw. Ct. 2006) (). Therefore, Plaintiff's claim against Wells Fargo for violations of the Pennsylvania Constitution must be dismissed.
Next, in Counts 3, 2 [sic], 3 and 3 [sic], Plaintiffs allege that Wells Fargo violated three provisions of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq. Specifically, Plaintiffs assert claims under § 2607(a), which prohibits fees or kickbacks for business referrals incident to a real estate settlement; § 2607(b), which prohibits splitting unearned real estate settlement fees with a third party; and § 2603(a), which requires completion of a uniform settlement statement by the person conducting the settlement. (Doc. No. 40 ¶¶ 79, 89, 102.) Wells Fargo argues that Plaintiffs lack standing to bring RESPA claims against it because they were not borrowers of Wells Fargo. (Doc. No. 55 at 13.) According to Wells Fargo, only borrowers have standing to bring claims under RESPA. (Id.)
In Alston v. Countrywide Financial Corp., 585 F.3d 753 (3d Cir. 2009), the Third Circuit stated that "RESPA only authorizes suits by individuals who receive a loan accompanied by a kickback or unlawful referral." Id. at 763 (citing In re Carter, 553 F.3d 979, 989 (6th Cir. 2009)). Here, Plaintiffs have failed to assert that they received a loan from Wells Fargo. In fact, Plaintiffs state that they were the sellers of the property. (Doc. No. 40 ¶¶ 46, 50.) Because there is no allegation that Plaintiffs received a loan from Wells Fargo, the Court finds that Plaintiffs lack standing to bring claims under RESPA against Wells Fargo. Plaintiffs have failed to respond to Wells Fargo's argument with any basis for the Court to conclude that they have standing. Therefore, Plaintiffs' claims against Wells Fargo under RESPA must be dismissed.4
In Count 3 [sic], Plaintiffs also assert a claim under 18 U.S.C. § 1010, a criminal statute that prohibits making false or fraudulent statements to the Department of Housing and Urban Development. (Doc. No. 40 ¶ 103.) However, § 1010 does not, on its face, provide a private right of action. Additionally, courts have refused to read an implied right of action into the statute, and Plaintiffs have not made any argument that such a private right exists. See Belle v. First Franklin, No. 08-11465, 2010 WL 3488658 at *4 (E.D. Mich. Sept. 3, 2010) (...
To continue reading
Request your trial