Binder v. Weststar Mortg., Inc., CIVIL ACTION No. 14-7073

Decision Date13 July 2016
Docket NumberCIVIL ACTION No. 14-7073
PartiesBRET BINDER., Plaintiff, v. WESTSTAR MORTGAGE, INC., et al. Defendants
CourtU.S. District Court — Eastern District of Pennsylvania


Bret Binder challenges the issuer, owners and servicers of a mortgage on his home, alleging these defendants violated several federal and state consumer protection statutes as well as committed breach of contract, breach of fiduciary duty, negligence and fraud. LoanCare LLC, WestStar Mortgage, Inc., Fannie Mae, and the J.G. Wentworth Company have moved to dismiss Mr. Binder's claims. Following the oral argument on the motions, the parties submitted a joint report reflecting their stipulation for the dismissal of certain claims and further outlining the contested claims for which the defendants still seek dismissal.

For the reasons outlined below, the Court will grant the motions in part and deny them in part.


The claims at issue in this case emanate from a May 24, 2012 Mortgage and Promissory Note executed by Mr. Binder and WestStar Mortgage to refinance the mortgage on Mr. Binder's home. The principal balance on the promissory note at the time of mortgage agreement was $417,000. In addition, the balance on the escrow account being held on Mr. Binder's behalf inorder to pay future tax and insurance payments on the property was $6,227.28. After entering into the mortgage agreement, Mr. Binder alleges that he made each of his monthly payments on time and in full.

In July 2012, Mr. Binder's mortgage was sold to Fannie Mae. At the same time, responsibility for servicing the mortgage transferred from WestStar to LoanCare. A year later, responsibility for servicing the mortgage was transferred back to WestStar. And then, in July 2015, Mr. Binder alleges that he was notified that responsibility for servicing the loan had again been transferred, this time to J.G. Wentworth Home Lending LLC.

At the point when the mortgage was initially executed, Mr. Binder alleges that WestStar was statutorily obligated to provide him with disclosures regarding a consumer's rights to rescind the transaction under certain circumstances. No such disclosures were provided. When the defendants subsequently obtained force-placed insurance, Mr. Binder alleges that this constituted a separate credit transaction for which the defendants were obligated by statute to provide him with additional disclosures. Again, Mr. Binder alleges that no such disclosures were provided.

Mr. Binder claims that starting in June 2012, shortly after the mortgage and note were executed, he began to notice that his account statements were riddled with errors. These included errors as to the beginning and ending balance of the mortgage, payment amounts due, payments received and charges imposed. In total, he alleges 288 errors on the monthly statements prepared by the defendants between July 1, 2012 and September 1, 2015. Mr. Binder alleges that he made numerous attempts during that time to contact the defendants in order to correct the errors, but the defendants failed to make an adequate or timely response to these inquiries. He also alleges that the defendants made errors with regards to his escrow account, such as misapplying his payments to the accounts, failing to make required tax and insurancepayments, and force-placing insurance—all of which resulted, he claims, in unnecessary overcharges. Mr. Binder also alleges that the defendants unlawfully increased the amount of his required escrow payment.


All four defendants have moved pursuant to Federal Rule of Evidence 12(b)(6) to dismiss the Amended Complaint, contending that it fails to state a claim upon which relief can be granted. "Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting the well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, a court concludes that those allegations 'could not raise a claim of entitlement to relief.'" Simon v. FIA Card Servs., N.A., 732 F.3d 259, 264 (3d Cir. 2013) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558 (2007)). In evaluating the merits of the defendants' motions to dismiss the Amended Complaint, the Court is looking for "something more than a mere possibility of the claim as alleged"; the plaintiff must have alleged in his Amended Complaint "enough facts to state a claim to relief that is plausible on its face." See Alston v. Wenerowicz, No. 14-2691, 2016 WL 878305, at *1 (E.D. Pa. Mar. 7, 2016) (citing Twombly, 550 U.S. at 570); accord McAndrew v. Deutsche Bank Nat. Trust Co., 977 F. Supp. 2d 440, 444 (M.D. Pa. 2013) ("Moreover, the plaintiff must allege facts that 'justify moving the case beyond the pleadings to the next stage of litigation.'") (citing Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234-35 (3d Cir. 2008)). While the Court is bound to accept all allegations in the Amended Complaint as true and draw all reasonable inferences in favor of the plaintiff in determining whether the motion should be granted, the Court is not obligated to accept as true "naked assertions" or conclusions as to the requirements of the law when couched as factual assertions in the Amended Complaint. See Alston, 2016 WL 878305, at *1 (citing Twombly, 550 U.S. at 555 (2007)); Ciferni v. Boilermakers Local 13, No. 15-4807, 2016 WL 304794, at *2 (E.D. Pa. Jan. 26, 2016).


The defendants have filed two separate motions to dismiss. Defendants LoanCare and Fannie Mae filed one motion to dismiss the claims in their entirety, in which WestStar and J.G. Wentworth joined. See Doc. No. 39 (hereinafter "LoanCare Br. at ___"). In addition to presenting arguments challenging the adequacy of the pleadings or legal basis of all ten counts in the Amended Complaint, LoanCare and Fannie Mae also argue that the Amended Complaint fails to adequately distinguish which defendants were responsible for which alleged conduct. Fannie Mae argues that the claims against it specifically fail because Mr. Binder did not provide notice and opportunity to cure deficiencies, as required under the mortgage agreement.

While joining in this motion, WestStar and J.G. Wentworth also have filed a separate motion to dismiss the Amended Complaint in part. See Doc. No. 38 (hereinafter "WestStar Br. at ___."). This motion argues that damages under the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq., ("RESPA") should be capped, the Truth In Lending Act, 15 U.S.C. § 1601 et seq., ("TILA") claims are time barred, the plaintiff fails to state a claim for breach of contract, punitive damages are not available, and the claims against J.G. Wentworth should be dismissed. For their part, LoanCare and Fannie Mae also join in WestStar/Wentworth's motion.

Mr. Binder has responded to these motions in a single filing. Certainly, a number of the issues raised in the motions overlap. Consequently, the Court will proceed to address the issues raised in both motions together.

Motion to Dismiss Claims Against Fannie Mae

The first argument raised in the Fannie Mae/LoanCare Motion relates to the specificity of the factual allegations against Fannie Mae. In general, the defendants argue that the Amended Complaint makes blanket allegations as to the liability of all the defendants without identifying which defendants were responsible for which conduct. In particular, the defendants point to thedearth of allegations referencing any conduct by Fannie Mae specifically. Despite spanning 33 pages and 193 paragraphs, the Amended Complaint expressly refers to Fannie Mae only four times. The only substantive factual allegation regarding Fannie Mae is that WestStar sold the mortgage to Fannie Mae on July 19, 2015. See Am. Compl. at ¶¶ 54, 58. The defendants contend that this blanket pleading is insufficient to state a claim against Fannie Mae, and that the factual allegation of the sale is not actionable in and of itself.

"Under Rule 8, Fed. R. Civ. P., pleadings are to be liberally construed, and a pleading which gives notice to the defendant of the allegations made against him and the grounds upon which they are based is generally sufficient." Palladino ex rel. U.S. v. VNA of S. New Jersey, Inc., 68 F. Supp. 2d 455, 475 (D.N.J. 1999) (citing Conley v. Gibson, 355 U.S. 41, 47 (1957); Barnhart v. Compugraphic Corporation, 936 F.2d 131, 135 n.7 (3d Cir.1991)). Nevertheless, "[e]ven under the most liberal notice pleading requirements of Rule 8(a), a plaintiff must differentiate between defendants." Shaw v. Hous. Auth. of Camden, No. 11-4291, 2012 WL 3283402, at *2 (D.N.J. Aug. 10, 2012); Agresta v. City of Philadelphia, 694 F. Supp. 117, 121 (E.D. Pa. 1988) (citing Negrich v. Hohn, 379 F.2d 213 (3d Cir.1967)). An allegation against multiple defendants that is bereft of specific wrongdoing by those proposed defendants is insufficient to state a claim. See Schiano v. MBNA, No. 05-1771, 2013 WL 2452681, at *20 (D.N.J. Feb. 11, 2013) (unpublished magistrate judge opinion), aff'd, No. 05-1771, 2013 WL 2455933 (D.N.J. June 3, 2013)). "Typically, a plaintiff cannot sue multiple defendants for fraud merely by alleging fraud with particularity as to one defendant." Indianapolis Life Ins. Co. v. Hentz, No. 06- 2152, 2008 WL 4453223, at *11 (M.D. Pa. Sept. 30, 2008).

The defendants are correct that Mr. Binder's pleadings fail to specify the wrongful conduct for which Fannie Mae is allegedly responsible. Fannie Mae did not generate or service the mortgage. The only allegation in the Amended Complaint regarding Fannie Mae is thatFannie Mae purchased the mortgage in July 2015. An assignee of a mortgage, however, is not liable for the fraud or statutory violations of the assignor. See Christopher v. First Mut. Corp., No. 05-01149, 2006 WL 166566, at *4 (E.D. Pa. Jan. 20, 2006); McMaster v. CIT Grp./Consumer Fin. Inc., No. 04-339, 2006 WL 1314379, at *11 (E.D. Pa. May 11, 2006). In Christopher, the plaintiff filed a complaint...

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