Becoat v. PNC Bank
| Decision Date | 31 March 2023 |
| Docket Number | Civil Action 1:21-cv-00830-SDG |
| Parties | CHARLES BECOAT II, Plaintiff, v. PNC BANK, NATIONAL ASSOCIATION, Defendant. |
| Court | U.S. District Court — Northern District of Georgia |
This matter is before the Court on various motions to dismiss Plaintiff's pleadings. For the following reasons, the first motion to dismiss the Second Amended Complaint [ECF 20] is DENIED AS MOOT, and the second motion to dismiss the Second Amended Complaint [ECF 21] is GRANTED.
On February 26, 2021, Plaintiff Charles Becoat II initiated this action pro se on behalf of himself and the estate of his mother, Freida J. Becoat.[1] The Court granted the motion to dismiss filed by then-Defendants PNC Bank, Kristen Kinander and Reed Smith LLP, but permitted Becoat to file an amended pleading on behalf of himself.[2] On February 25, 2022, Becoat filed his First Amended Complaint (FAC), naming only PNC Bank as Defendant.[3] PNC then timely moved to dismiss the FAC.[4] Becoat responded to that motion by filing-without leave - a Second Amended Complaint (SAC).[5] PNC moved to dismiss the SAC as well.[6]Becoat did not respond to the second dismissal motion.
Because Becoat continues to proceed pro se, the Court construes his pleadings leniently and holds them “to less stringent standards than formal pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citations omitted) (quotation marks omitted); see also Tannenbaum v. United States, 148 F.3d 1262, 1263 (11th Cir. 1998). Taken in this light, the FAC alleges that, when Becoat's mother died, she left him a property in Chicago that was subject to a mortgage originated and serviced by PNC.[7] Becoat sought to assume the loan and obtain a modification or forbearance from PNC; his requests were denied, as were his appeals of the denial.[8] His claims are based on PNC's alleged obligation to allow him to assume his mother's loan and receive a temporary payment plan or loan modification.[9] Becoat asserts that PNC is guilty of violating his civil rights, breach of contract, wrongful foreclosure, unfair business practices, intentional infliction of emotional distress, breach of fiduciary duty, negligence, and fraud.[10]
Shortly after PNC moved to dismiss the FAC, Becoat filed his SAC.[11] The factual allegations in the SAC appear nearly identical to those in the FAC, but the SAC includes additional legal contentions. Specifically, it adds allegations that PNC violated the Fair Housing Act, violated the Illinois Consumer Fraud and Deceptive Practices Act, violated Regulation Z, and engaged in illegal dual tracking.[12] Although Becoat filed his SAC without leave of Court, PNC did not object on this basis.[13] As a result, the Court interprets PNC's motion to dismiss the SAC as its written acquiescence to Becoat's unauthorized amendment. Fed.R.Civ.P. 15(a)(2).
PNC seeks dismissal with prejudice under Rule 12(b)(6).[14] To avoid dismissal on this basis, a complaint must contain sufficient factual allegations to “state a claim to relief that is plausible on its face.” Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1289 (11th Cir. 2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). As noted above, the Court treats the SAC as the operative pleading. Dresdner Bank AG, Dresdner Bank AG in Hamburg v. M/V OLYMPIA VOYAGER, 463 F.3d 1210, 1215 (11th Cir. 2006) (“An amended pleading supersedes the former pleading.”). PNC puts forward several arguments about why dismissal is appropriate. First, it asserts it was never properly served.[15] Next, PNC argues that it was under no obligation to let Becoat assume his mother's mortgage.[16] Finally, it contends that the individual causes of action Becoat attempts to assert are insufficiently pleaded.[17]
1. Service
PNC contends that Becoat did not serve it within 90 days after the original Complaint was filed.[18] In its January 28, 2022 Order dismissing the original Complaint, however, the Court directed that Becoat serve the summons and any amended pleading on PNC consistent with Rule 4.[19] This provided Becoat with additional time to effect service. Fed.R.Civ.P. 4(m). PNC was served with the summons and SAC on March 28.[20] That is well within 90 days of the Court's Order and consistent with Rule 4. PNC does not assert that there was any defect in service other than the purported lack of timeliness.[21] Because service was within the time permitted under the Court's Order, PNC is not entitled to dismissal on this basis.
2. Civil Rights Violations
The SAC asserts that PNC violated Becoat's rights to fair housing and equal opportunity to access credit.[22] This claim appears to be based on PNC's denial of Becoat's requests to assume his mother's mortgage. PNC argues that the SAC fails to allege that Becoat ever actually applied for an assumption.[23] Given that Becoat is proceeding pro se and this case is at the motion to dismiss stage, PNC's argument is based on an inappropriately restricted reading of the SAC. Becoat alleges that PNC was required to permit him to assume the loan and take advantage of other loss mitigation options.[24] He specifically pleads that PNC refused to allow the assumption.[25] He sent PNC an application for a loan modification and requests for loss mitigation options or a temporary payment plan.[26] His application and requests were denied.[27] These allegations are sufficient to support Becoat's contention that he sought and was denied the ability to assume the mortgage.
However, PNC correctly characterizes the SAC as being founded on the incorrect premise that PNC was required to permit Becoat to assume the mortgage and modify its terms.[28] None of the authorities Becoat cites mandated such a result. He has not pointed to any provision of the “Saint Germain Act of 1982” that entitles heirs “to loan assumptions and/or other loss mitigation options upon the death of a borrower.”[29] Rather, that statute prevents lenders from invoking a due-on-sale option in a loan agreement when real property is transferred to a relative because of the borrower's death. 12 U.S.C. § 1701j-3(d)(5). There is no allegation in the SAC that PNC invoked such a clause when Becoat inherited the house.
Becoat further asserts that the Consumer Protection Act permits heirs to assume loans and the Federal Housing Authority allows for heirs to assume a mortgage and “refinance, receive a temporary payment plan, forbearance or modification.”[30] He has not, however, pointed to any provision of the Consumer Protection Act or the Fair Housing Act that obligated PNC to allow the assumption and modification. Nor has he demonstrated that a private right of action exists as a result of any duty created under either Act.
Becoat also relies on an interpretive rule issued by the Consumer Financial Protection Bureau under Regulation Z.[31] That rule does not support Becoat's contentions. The rule addresses instances in which a successor-in-interest has acquired title to a dwelling and has been added or substituted as an obligor on the mortgage.[32] Under those circumstances, the “Ability-to-Repay Rule” does not apply.[33] But there is no allegation in the SAC that Becoat was ever added or substituted as an obligor on his mother's mortgage - rather, his claims are based on the contention that he was denied the ability to assume the mortgage in the first place. The interpretive rule does not provide support for Becoat's primary argument that PNC was obligated to allow the assumption.
Finally, Becoat has not alleged any facts that suggest PNC's refusal to allow him to assume the mortgage or to offer a loan modification had anything to do with his race. The SAC contends that PNC employs particular practices primarily against African Americans,[34] but contains no facts that make this assertion plausible in general or as applied to Becoat himself. Am. Dental Ass'n, 605 F.3d at 1289. And Becoat hasn't even alleged that PNC was ever aware of his race.
In short, the SAC fails to identify any legal basis for the duty Becoat seeks to impose on PNC. He has not stated any claim that PNC violated his civil rights.
3. State-Law Causes of Action
As the Court understands Becoat's pleading, he is asserting state-law causes of action for breach of contract, wrongful foreclosure, unfair business practices, intentional infliction of emotional distress (IIED), breach of fiduciary duty, negligence, and fraud.[35] Without a valid civil-rights claim, Becoat has not stated a federal cause of action and the Court lacks federal question jurisdiction. Further, the SAC does not establish diversity jurisdiction and the Court does not find the exercise of supplemental jurisdiction over Becoat's state-law claims appropriate.
The party invoking federal jurisdiction bears the burden of proving that such jurisdiction exists. Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th Cir. 2001). Neither the amount in controversy nor the existence of complete diversity of citizenship are plain from the SAC. 28 U.S.C. § 1332. Becoat has therefore failed to show the existence of diversity jurisdiction.
Supplemental jurisdiction under 28 U.S.C. § 1367(a) is discretionary and “a court may exercise its discretion to dismiss or retain state claims after dismissing claims subject to its original jurisdiction under 28 U.S.C. § 1367(c)(3).” Knowles v. Hart, 825 Fed.Appx. 646, 650 (11th Cir. 2020). “[D]ecisions of state law should be avoided [by federal courts] both as a matter of comity and to promote justice between the parties, by procuring them a surer-footed reading of applicable law.” United...
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