Cardoso v. Wells Fargo Bank
| Decision Date | 20 September 2022 |
| Docket Number | 21-CV-8189 (KMK) |
| Parties | EDWARD CARDOSO and JANE CARDOSO, Plaintiffs, v. WELLS FARGO BANK, N.A. a/k/a WELLS FARGO HOME MORTGAGE, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Rick S. Cowle, Esq.
The Law Office of Rick S. Cowle
Counsel for Plaintiffs
Angela Smedley, Esq.
Sean Anderson, Esq.
Winston & Strawn LLP
Counsel for Defendant
Edward and Jane Cardoso (“Plaintiffs”) bring this Action against Wells Fargo Bank, N.A. (“Wells Fargo” or “Defendant”) alleging various tort claims arising out of Defendant's denial of Plaintiffs' loan modification request and foreclosure of Plaintiffs' home mortgage. Before the Court is Defendant's Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (the “Motion”). (See Not. of Mot. (Dkt. No. 22).) For the following reasons, the Motion is granted.
The following facts are drawn from the Complaint and are assumed to be true for purposes of resolving the instant Motion. See Div. 1181 Amalgamated Transit Union-N.Y. Emps. Pension Fund v. N.Y.C. Dep't of Educ., 9 F.4th 91, 94 (2d Cir. 2021) (per curiam).
On April 10, 2009, Plaintiffs obtained a fixed rate mortgage loan from Wells Fargo for a residential property located at 112 Wixon Pond Road, Mahopac, NY. (See Compl. ¶ 4; see also Dkt. No. 21-2 (“Mortgage Loan”).)[1] Plaintiffs lost their jobs and began to experience financial problems in or around 2016, which led to Plaintiffs falling beyond on their mortgage payments. (See Compl. ¶ 5.) As a result, in September 2016, Wells Fargo began foreclosure proceedings in the New York Supreme Court for Putnam County. (See Dkt. No. 21-3 (Foreclosure Docket).)[2] Plaintiffs allege that during the pendency of the foreclosure proceedings, Plaintiffs pursued multiple avenues for loan modification so that they could maintain possession of their home. (See Compl. ¶¶ 7-14.) However, Plaintiffs allege that Wells Fargo-and later, U.S. Bank, as Trustee for the RMAC Trust, Series 2016-CIT (“U.S. Bank”), to which Wells Fargo assigned Plaintiffs' mortgage loan on February 17, 2017, (see Dkt. No. 21-4 (Assignment of Mortgage))[3]-denied Plaintiffs' sought modifications, (see Compl. ¶¶ 11-14). On July 2, 2018, a default judgment was entered against Plaintiffs in the foreclosure action, which was upheld on appeal, and on March 20, 2019, U.S. Bank acquired Plaintiffs' home after a foreclosure sale. (See Dkt. Nos. 21-5, 21-6.)[4] U.S. Bank took title to Plaintiffs' home in December 2019. (See Compl. ¶ 19.)
Plaintiffs allege that as a result of the foreclosure and loss of their home, “Plaintiffs were devastated, embarrassed, and emotionally bankrupt” and “humiliated that their neighbors knew they were foreclosed upon.” (Id. ¶ 21.) Plaintiffs also allege that they “experienced marital problems as a result of the stress of the foreclosure, the forced move, and the impact upon their lives,” and “began to see a psychiatrist for treatment of depression and emotional issues caused by [Defendant's] actions.” (Id. ¶¶ 22-23.)
On or about April 21, 2021, Plaintiffs received a letter from Wells Fargo, which stated:
During a review of your account history, we found that a faulty calculation was used when we considered your eligibility for a trial payment plan that may have resulted in a loan modification. Because of the faulty calculation, we didn't offer the trial payment plan. We apologize if this error caused any negative impact. We've carefully considered what we can do for you. You'll find a payment enclosed to help make up for any financial loss that may have resulted from this error. Cashing this check will not waive or release any rights you have, nor will it obligate you to do anything. You retain the right to pursue all other applicable remedies. You also retain the option to elect mediation.
(Id. ¶ 25.) The letter enclosed a check for $15,000. (See id.) Plaintiffs received a second letter on April 30, 2021, reminding Plaintiffs of their option to participate in mediation. (See id. ¶ 26.)
Plaintiffs allege that the faulty calculation referenced in Wells Fargo's letter was due to “software issues that [Wells Fargo] failed to fix for five to eight years,” “even though the government had already cited [Wells Fargo] for failing to adequately audit its modification and foreclosure procedures.” (Id. ¶¶ 29-30; see also id. ¶¶ 32-39.) Plaintiffs allege that “[t]his outrageous conduct by [Wells Fargo] was a violation of numerous government statutes and requirements such as the [Home Affordable Modification Program (‘HAMP')].” (Id. ¶ 34.) And, “[a]s a result of [Wells Fargo's] actions, the Plaintiffs lost their home, lost over $100,000.00 in equity in their home, and have suffered embarrassment and humiliation, and experienced marital problems.” (Id. ¶ 40.)
Plaintiffs filed their Complaint in New York Supreme Court for the County of Putnam on August 12, 2021, bringing claims against both Wells Fargo and U.S. Bank. (See Compl.) On October 4, 2021, Wells Fargo removed the Action to this Court on the basis of this Court's diversity jurisdiction under 28 U.S.C. § 1332; U.S. Bank consented to the removal on October 11, 2021. (See Not. of Removal (Dkt. No. 1); Consent to Removal (Dkt. No. 9).) On October 8, 2021, U.S. Bank filed a pre-motion letter in anticipation of filing a motion to dismiss. (See Dkt. No. 8.) After receiving a response from Plaintiffs, (see Dkt. No. 12), the Court set and held a pre-motion conference at which the Court adopted a briefing schedule, (see Dkt. Nos. 13, 15; see also Dkt. (minute entry for Nov. 9, 2021)). U.S. Bank filed its motion to dismiss on December 17, 2021, (see Not. of Mot. (Dkt. No. 19); U.S. Bank's Mem. of Law in Supp. of Mot. (Dkt. No. 20); Decl. of John E. Brigandi, Esq. in Supp. of U.S. Bank's Mot. (Dkt. No. 21)), but on January 11, 2022, Plaintiffs notified the Court that Plaintiffs and U.S. Bank had reached a settlement, (see Dkt. No. 24). Plaintiffs filed a stipulation of voluntary dismissal of their claims against U.S. Bank on February 8, 2022, (see Dkt. No. 29), which the Court entered on February 9, 2022, (see Dkt. No. 30).
Meanwhile, on November 12, 2021, Wells Fargo filed a pre-motion letter in anticipation of filing a motion to dismiss. (See Dkt. No. 16.) On December 1, 2021, the Court set a briefing schedule. (See Dkt. No. 18.) Wells Fargo filed its Motion on January 10, 2022. (See Not. of Mot. (Dkt. No. 22); Def.'s Mem. of Law in Supp. of Mot. (“Def.'s Mem.”) (Dkt. No. 23).) Plaintiffs filed their Opposition on February 10, 2022, ( ) , and Defendant filed its Reply on February 24, 2022, .
“The standards of review for a motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction and under 12(b)(6) for failure to state a claim are ‘substantively identical.'” Gonzalez v. Option One Mortg. Corp., No. 12-CV-1470, 2014 WL 2475893, at *2 (D. Conn. June 3, 2014) (quoting Lerner v. Fleet Bank, N.A., 318 F.3d 113, 128 (2d Cir. 2003)).
“A federal court has subject matter jurisdiction over a cause of action only when it has authority to adjudicate the cause pressed in the complaint.” Bryant v. Steele, 25 F.Supp.3d 233, 241 (E.D.N.Y. 2014) (quotation marks omitted). “Determining the existence of subject matter jurisdiction is a threshold inquiry[,] and a claim is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Morrison v. Nat'l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008), aff'd, 561 U.S. 247 (2010); United States v. Bond, 762 F.3d 255, 263 (2d Cir. 2014) ().
The Second Circuit has explained that a challenge to subject-matter jurisdiction pursuant to Rule 12(b)(1) may be facial or fact-based. See Carter v. HealthPort Techs., LLC, 822 F.3d 47, 56 (2d Cir. 2016). When a defendant raises a facial challenge to standing based solely on the complaint and the documents attached to it, “the plaintiff has no evidentiary burden,” id. (citing Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011)), and a court must determine whether the plaintiff asserting standing “alleges facts that affirmatively and plausibly suggest that the plaintiff has standing to sue,” id. (quoting Selevan v. N.Y. Thruway Auth., 584 F.3d 82, 88 (2d Cir.2009)). In making such a determination, a court must accept as true all allegations in the complaint and draw all inferences in the plaintiff's favor. Id. at 57. However, where a Rule 12(b)(1) motion is fact-based and a defendant proffers evidence outside the pleadings, a plaintiff must either come forward with controverting evidence or rest on the pleadings if the evidence offered by the defendant is immaterial. See Katz v. Donna Karan Co., 872 F.3d 114, 119 (2d Cir. 2017). If the extrinsic evidence presented by the defendant is material and controverted, the Court must make findings of fact in aid of its decision as to standing. See Carter, 822 F.3d at 57.
The Supreme Court has held that although a complaint “does not need detailed factual allegations” to survive a Rule 12(b)(6) motion to dismiss, “a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a...
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