Burns v. Bank of America

• Decision Date: 04 December 2008
• Docket Number: No. 03 Civ. 1685(RMB)(JCF).,03 Civ. 1685(RMB)(JCF).
• Citation: 655 F.Supp.2d 240
• Parties: Kevin E. BURNS and Barbara R. Burns, and Renee A. Defina, Plaintiffs, v. BANK OF AMERICA, its affiliates, subsidiaries and agents, including but not limited to Ba Mortgage, Defendants.
• Court: U.S. District Court — Southern District of New York

655 F.Supp.2d 240

Kevin E. BURNS and Barbara R. Burns, and Renee A. Defina, Plaintiffs, v. BANK OF AMERICA, its affiliates, subsidiaries and agents, including but not limited to Ba Mortgage, Defendants.

No. 03 Civ. 1685(RMB)(JCF).

United States District Court, S.D. New York.

December 4, 2008.

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Kevin E. Burns, Hackensack, NJ, pro se.

Barbara Burns, Hackensack, NJ, pro se.

Keith Michael Brandofino, Steven Scott Rand, Zeichner Ellman & Krause LLP, New York, NY, for Defendant.

DECISION AND ORDER

RICHARD M. BERMAN, District Judge.

I. Introduction

On or about August 2, 2005, Kevin E. Burns, Barbara R. Burns, and Renee Defina (collectively, "Plaintiffs") filed a pro se amended complaint ("Amended Complaint") alleging, among other things, that Bank of America, its affiliates, subsidiaries, and agents, including Bank of America Mortgage (collectively, "Bank of America" or "Defendants") violated the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. ("FCRA"), the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"), the Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"), and various provisions of Minnesota state law.¹ Plaintiffs' allegations relate to (i) inaccurate credit information about Plaintiffs that allegedly was reported to various credit bureaus by Bank of America beginning on November 1, 2001, and (ii) the December 5, 2002 (foreclosure) sale of Plaintiffs' mortgaged property in Dakota County, Minnesota ("Minnesota Property"). (See Am. Compl., undated, filed Aug. 2, 2005, at 8-21.)²

Plaintiffs filed the Amended Complaint following the December 14, 2005 decision of the United States Court of Appeals for the Second Circuit which vacated this Court's December 18, 2003 Order dismissing Plaintiffs' original complaint, dated March 11, 2003. See Burns v. Bank of America, 115 Fed.Appx. 105 (2d Cir.2004) ("The district court properly granted the [Defendants' motion to dismiss the complaint for substantially the reasons it articulated in its order, but we think it prudent to allow the plaintiffs an opportunity to amend their complaint.") (citations omitted); see also Burns v. Bank of America, No. 03 Civ. 1685, 2003 WL 22990065 (S.D.N.Y. Dec. 18, 2003).

On or about June 28, 2006, this Court issued an order granting in part Bank of America's motion to dismiss the Amended Complaint. The June 28, 2006 Order denied Bank of America's motion with respect to Plaintiffs' claims under FCRA § 1681s-2(b), the FDCPA, the Minnesota Consumer Fraud Act ("MCFA"), and Minnesota trespass, conversion, and slander law. (See June 28, 2006 Order at 6, 28.) At that time, the Court also denied Plaintiffs' motion for summary judgment on their claims that "Bank of America had no legal rights against the property and its `foreclosure' of the ... mortgage [was] illegal and void," because, among other things, (i) "a proposed determination of the parties' legal (real property) interest in the mortgaged property and the legality of the 2002 foreclosure" were "issues not found in the Amended Complaint," and (ii) "Minnesota Statute § 542.02 governs Minnesota Real Property claims and mandates that Plaintiffs' claims must be litigated in Dakota County, Minnesota." (Id. at 26 (internal quotations and citations omitted).)

On or about April 24, 2008, Bank of America moved for summary judgment on Plaintiffs' remaining claims pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Fed. R. Civ.P.") arguing, among other things, that: (1) Plaintiffs' FCRA and MCFA claims should be dismissed because Plaintiffs have "fail[ed] to provide any evidence of ... alleged damages"; (2) "[u]nder FCRA § 1681n(c), this Court should award Bank of America its attorney's fees incurred in responding to Plaintiffs' ... harassing and knowingly unsubstantiated FCRA allegations"; (3) Plaintiffs have no claim under the FDCPA because "Bank of America was a creditor and not a debt collector with respect to [Plaintiffs' loan"; (4) Plaintiffs' Minnesota state law trespass, conversion, and slander of title claims fail because Bank of America had the right "as a matter of contract and as a matter of law" to enter and take possession of the Minnesota Property to prevent waste and to commence a foreclosure action; and (5) Plaintiffs "should be precluded pursuant to [Fed.R.Civ.P.] 37 from offering any evidence not previously disclosed in discovery." (Bank of America's Mot. for Summ J., dated Apr. 24, 2008 ("BOA Mot."), at 7, 12, 28; see also id. at 20-21.)

On or about June 4, 2008, Plaintiffs filed an opposition to Bank of America's motion and "renewed" motion for summary judgment on all of Plaintiffs' (remaining) federal and state law claims. (See Pis. Renewed Mot. for Summ. J., undated, filed June 4, 2008 ("Pls. Cross-Mot.").)³ Plaintiffs also moved pursuant to Fed.R.Civ.P. 11 and 37 for sanctions "as just compensation for costs ... incurred by Plaintiffs in responding to the duplicative, voluminous pleadings and `certifications' filed by defense counsel, an unsuccessful legal position asserted on appeal, and two unsuccessful motions to dismiss"; and pursuant to Fed.R.Civ.P. 56(f) "to enable the [deposition of Minnesota attorney Lawrence Wilford (`Wilford')] to be taken." (Pls. Cross-Mot. at 12, 20.)⁴

On or about June 19, 2008, Bank of America filed a reply, arguing, among other things, that Plaintiffs "have sought this relief [i.e., sanctions] previously in discovery motions before [United States] Magistrate Judge James C. Francis IV, and their applications have been summarily denied." (Bank of America's Reply in Supp. of Mot. for Summ. J., dated June 19, 2008 ("BOA Reply"), at 8.) On or about July 14, 2008, Plaintiffs filed a sur-reply ("Pls. Sur-Reply"). As noted, oral argument was held on November 19, 2008.

For the following reasons, Bank of America's motion for summary judgment is granted in part and denied in part, and Plaintiffs' motion for summary judgment is denied.

II. Background

On October 28, 1988, Kevin and Barbara Burns "as husband and wife ... executed a promissory note ... evidencing a $111,000.00 mortgage loan ... made by Ameristar Financial Corporation (`Ameristar') to Mr. and Ms. Burns." (Bank of America Rule 56.1 Statement, dated Apr. 24, 2008 ("BOA 56.1"), ¶ 1.) The promissory note "was secured by a mortgage dated October 28, 1988 (`Mortgage') forming a lien on [the Minnesota Property]." (BOA 56.1 ¶ 2.) "On November 30, 1988, Ameristar caused the Mortgage to be duly filed with the office of the Registrar of Titles of Dakota County, Minnesota." (BOA 56.1 ¶ 4.) "On February 15, 1990, Ameristar assigned the Mortgage to [Bank of America's predecessor in interest] Goldome Realty Credit Corporation." (BOA 56.1 ¶ 4.) On or about December 1, 1999, Bank of America obtained the Mortgage "by way of merger and a series of name changes." (BOA Mot. at 25; see also BOA 56.1 ¶¶ 4-9, Decl. of Jacqueline M. Tobolski, dated Apr. 22, 2008 ("Tobolski Decl."), ¶¶ 4-9 & Exs. B, C; Decl. of Lawrence A. Wilford, dated Apr. 18, 2008 ("Wilford Decl."), Ex. I (attached Certificate of Title to Minnesota Property).)

Bank of America asserts that "[o]n July 5, 2002, the [Mortgage] was in default, and it remained in default [in the amount of approximately $99,994.51] through the date of the foreclosure sale" on December 5, 2002. (BOA 56.1 ¶ 21; see also Wilford Decl., Ex. H.) "On September 6, 2002, Bank of America ordered an initial property inspection from First American [Field Services (`First American')] in connection with the [Minnesota Property]" and "First American subcontracted with Fisher Pratt, Inc. (`Fisher Pratt')." (BOA 56.1 ¶¶ 18, 19; see also Decl. of Michael W. Smith, dated Apr. 18, 2008 ("Smith Decl."), ¶ 4, 5.) Fisher Pratt inspected and/or secured the Minnesota Property on or about September 6, 2002, September 23, 2002, October 17, 2002, November 17, 2002, and December 17, 2002, and indicated that the property was vacant on those occasions. (See BOA 56.1 ¶¶ 20, 23, 25, 34; see also Smith Decl. ¶¶ 7, 9, 12, 13, 14, 16; Tobolski Decl., Ex. L; Wilford Decl., Ex. F.)

"On September 12, 2002, Bank of America referred the [Mortgage] to outside counsel, i.e., the law firm of Leonard, O'Brien, Wilford, Spencer and Gale, Ltd. (`Leonard, O'Brien'), to commence non-judicial foreclosure proceedings." (BOA 56.1 ¶ 21; see also Toboloski Decl. ¶ 21.) "On October 1, 2002, Leonard, O'Brien sent notices to the Burns at the [Minnesota Property address] notifying them of their default, Bank of America's commencement of foreclosure proceedings against them and the Burns's right to reinstate the mortgage." (BOA 56.1 ¶ 29; see also Wilford Decl. ¶ 7 & Ex. A.) "The Dakota County Tribune published [a] notice of non-judicial foreclosure sale [of the Minnesota Property] from October 10, 2002 to November 14, 2002, and the notice indicated that the sale date was scheduled for December 5, 2002." (BOA 56. ¶ 32; see also Wilford Decl. ¶ 10 & Ex. D.)

"On December 5, 2002, third-party Wells Fargo Bank Minnesota, N.A. purchased the [Minnesota Property]." (BOA 56.1 ¶ 21; see also Wilford Decl. ¶ 13 & Ex. G.) "The [P]laintiffs did not exercise their rights of redemption concerning the [Minnesota] Property during the statutory six (6) month redemption period listed in the Sheriffs Certificate of Sale." (BOA 56.1 ¶ 39.) In or about June 2003, "R.A Ungerman Construction, Inc. [`R.A. Ungerman'] obtained title ... by redeeming" the Minnesota Property. (BOA 56.1 ¶ 40.) On or about December 24, 2003, following a duly noticed evidentiary hearing, "the Dakota County Minnesota District Court issued an Order in which it held, inter alia, that a new certificate of title [to the Minnesota Property] should be issued to [R.A. Ungerman] and that the foreclosure and Sheriff sale conducted [by Bank of America Mortgage] was proper in every material respect." (BOA 56.1 ¶ 41; see also Wilford Decl. ¶ 16 & Ex....