Belfi v. USAA Fed. Sav. Bank

Decision Date07 September 2022
Docket NumberCivil Action 22-2083
PartiesALEX BELFI, Plaintiff v. USAA FEDERAL SAVINGS BANK et al., Defendants
CourtU.S. District Court — Eastern District of Pennsylvania

Alex Belfi asks the Court to grant quiet title on a property located in Philadelphia, PA. He also alleges violations of several federal and state statutes related to his mortgage on this property. Because Mr. Belfi fails to allege any plausible bases for his federal claims and the Court lacks subject matter jurisdiction over the other claims, the Court will dismiss Mr. Beifi's complaint against all defendants, in part with prejudice and in part without prejudice.

I. Mr. Beifi's Complaint

Mr Belfi filed a 390-page complaint on May 25, 2022, and then a 397-page Amended Complaint on June 18, 2022. Doc. Nos. 1 and 8. Mr. Belfi seeks to quiet title on his property at 1502 E Moyamensing Avenue Philadelphia, Pennsylvania ("the Property"). Am. Compl. at 63, Doc. No. 8.

Mr Belfi took out a Veteran Home Loan mortgage on the Property for $400,000 in June 2016 with USAA. Am. Compl. ¶ 1. Mr. Beifi's mortgage required monthly payments beginning in August 2016. Am. Compl. ¶ 4. In August 2018, USAA sent Mr. Belfi a foreclosure notice stating that "Failure to pay $4,621.54 by 10/05/2018 . . . may result in acceleration of the sums secured by the Security Instrument, foreclosure proceedings and sale of the property." Id. ¶ 15.

USAA then instituted a foreclosure action against Mr. Belfi in the Philadelphia Court of Common Pleas in January 2019. Id. at ¶ 18.

Mr. Belfi alleges that USAA used the Mortgage Electronic Registration System ("MERS") to record his mortgage without his permission. After his foreclosure notice, Mr. Belfi alleges that Omar Basped (who, according to Mr. Belfi is actually a fictitious person) executed a fraudulent mortgage assignment in November 2018 that "does not represent an accurate purchase and sale of [his] Note and Mortgage from the purported Lender." Id. ¶¶ 13, 76,118,120, He alleges that this action violated the Pennsylvania Uniform Electronic Transaction Act,[1] the Pennsylvania Uniform Real Property Electronic Recording Act,[2] the Pennsylvania Unfair Trade Practices and Consumer Protection Law,[3] and involved the torts of fraud in the inducement, fraudulent concealment, and breach of contract, He also alleges deceit by USAA's attorneys, although he does not name any as defendants. Id., ¶ 188. His primary "fraud" allegation seems to be that "he was not aware, before signing, that the [mortgage] contract contained a Mortgage Identification Number... By signing this document, [Mr.] Belfi unknowingly, by purposeful deceit, b[r]ought Merscorp Holding, Inc and the Mers® System into the contractual nexus." Am. Compl, ¶ 140.

For the federal claims, Mr. Belfi alleges that USAA violated the Fair Credit Report Act (FCRA) by causing a shorter length of credit history to appear in his credit reports (when his mortgage was assigned to a new lender), the Fair Debt Collection Practices Act by failing to send him an Act 6 notice of foreclosure before filing the 2019 Court of Common Pleas foreclosure action, and the Racketeer and Corrupt Organizations ("RICO") Act by defrauding the U.S. Government through use of mortgage-backed securities and "double-dipping" from the VA Loan Guaranty program. Id. at 49-61. He also mentions the Lanham Act based on MERSCORP Holding Inc.'s use of the "MERS" trademark. Id. ¶ 143, In his lengthy complaint, Mr. Belfi attaches various MERS corporate and trademark filings, MERS records, two academic papers about electronic mortgage registration, and a transcript from a New Jersey state court case involving MERS.[4]

Mr. Belfi asks the Court to quiet title in his favor for the property. Mr. Belfi also seeks "actual damages, civil penalties, and attorney fees." Am. Compl. at 63. Additionally, he has filed a separate motion asking the Court to appoint counsel for him. Doc. No. 7.

II. Related Proceedings

This is not the first or only case on court dockets regarding Mr. Belfi's mortgage. The foreclosure action on the Property is currently pending in the Philadelphia Court of Common Pleas. USAA Fed. Sav. Bank v. Belfi, Case No. 190100496 (Pa. Ct. Comm. Pis.). The Court of Common Pleas deferred the foreclosure action pending Mr. Belfi's bankruptcy proceedings in February 2022. The court recently removed the case from deferred status on August 11, 2022 based on the completion of Mr. Belfi's bankruptcy proceedings. USAA Fed. Sav. Bank v. Belfi, Case No. 190100496 (Pa. Ct. Comm. Pis. Aug. 11, 2022).

Mr. Belfi also previously attempted to remove his foreclosure action to federal court. USAA FSB v. Belfi, No. 2:19-cv-03607 (E.D. Pa. 2019). The federal court remanded the case to state court in September 2020. USAA Fed, Sav. Bank v. Belfi, No. 19-cv-3607, 2020 WL 5763585 (E.D. Pa. Sept. 28, 2020).[5]

III. Pending Motions

In the instant litigation, there are three pending motions to dismiss filed by the defendants. Mr. Belfi also filed a "motion in opposition to Defendants' motion to dismiss," which the Court construes as his opposition brief. Doc. No. 18.

In the first motion, most of the defendants (MERSCORP Holding Inc., Mortgage Registration Systems, Inc., Nationstar Mortgage LLC, and USAA Federal Savings Bank[6]) sought dismissal based on Mr. Belfi's purported failure to disclose the present claims in his bankruptcy filings. Doc. No. 10. Mr. Belfi then responded that he had amended his bankruptcy filings. Doc. No. 12, at 3.

After this response, two of the defendants filed separate motions to dismiss under Rule 12(b)(6) for failure to state a claim. These motions appear to assume that the prior motion is moot, although the defendants do not address their prior motion at all. The Court will treat the first motion to dismiss as moot based on the amended bankruptcy filings and focus on the two subsequent motions to dismiss as superseding motions. In their individual motions to dismiss, Wells Fargo asserts that Mr. Belfi fails to state a claim against it, Doc. No. 14, and USAA Federal Savings Bank asserts that each of Mr. Belfi's claims are barred by the statute of limitations and/or fail to state a legally sufficient claim, Doc. No. 17.

Legal Standard

In evaluating motions to dismiss, the Court assumes that the allegations contained in the complaint are true. Cardio-Med. Assocs. Ltd. v. Crozer-Chester Med. Ctr., 721 F.2d 68, 75 (3d Cir. 1983 (citing Mortensen v. First Fed. Sav. And Loan Ass'n 549 F.2d, 884891 (3d Cir. 1977)).

In addition, "courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record." Pension Ben. Guar. Corp. v. White Consol Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). This includes state and federal judicial proceedings. Sturgeon v. Pharmerica Corp., 438 F.Supp.3d 246, 257 (E.D. Pa. 2020).

I. Rule 12(b)(1) Jurisdictional Challenge

A Rule 12(b)(1) motion challenges a federal court's authority to hear a claim for lack of subject matter jurisdiction. Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d Cir. 2006). The plaintiff "bears the burden of showing that the case is properly before the court at all stages of the litigation." Packard v. Provident Nat'l Bank, 994 F.2d 1039, 1045 (3d Cir. 1993). If the defendant does not raise any factual disputes in a Rule 12(b)(1) challenge to jurisdiction, the Court must accept the complaint's allegations as true and consider only the pleadings. Gould Elecs. Inc. v. United States, 220 F.3d 169, 177 (3d Cir. 2000).

Federal courts are courts of limited subject matter jurisdiction, presumed to "lack jurisdiction 'unless the contrary appears affirmatively from the record.'" Renne v. Geary, 501 U.S. 312, 316 (1991) (quoting Bender v. Williamsport Area Sch, Dist., 475 U.S. 534, 546 (1986)). Because subject matter jurisdiction is not waivable, the Court can raise subject-matter jurisdiction concerns sua sponte. Nesbit v. Gears Unlimited, Inc., 347 F.3d 72, 77 (3d Cir, 2003).

II. Rule 12(b)(6) Failure to State a Claim

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face."' Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court construes a pro se litigant's allegations liberally. Vogt v. Wetzel, 8 F.4th 182, 185 (3d Cir. 2021). But "pro se litigants still must allege sufficient facts in their complaints to support a claim." Mala v. Crown Bay Marina, Inc., 704 F.3d 239, 245 (3d Cir. 2013). Additionally, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Lloyd v. Salameh, 442 Fed.Appx. 630, 631 (3d Cir. 2011) (quoting Iqbal, 556 U.S. at 678).

"[E]ven if a party does not make a formal motion to dismiss, the Court may on its own initiative dismiss the complaint for failure to state a claim upon which relief can be granted where the inadequacy of the complaint is apparent as a matter of law." Zaslow v. Coleman, 103 F.Supp.3d 657, 664 (E.D. Pa. 2015) (internal quotation marks omitted). If the Court dismisses a claim, "amendment must be permitted in [the pro se] context unless it would be inequitable or futile." Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002).


Mr Belfi raises a variety of state and federal law claims. Federal courts typically begin with the federal claims before determining whether to exercise supplemental jurisdiction over the state law claims. Thus, the Court begins with Mr, Belfi's assorted federal claims.

I. Federal Claims

Mr Belfi...

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