Clark v. Santander Bank
| Docket Number | 3:22-CV-0039 (SVN) |
| Decision Date | 27 October 2023 |
| Parties | GORDON CLARK, Plaintiff, v. SANTANDER BANK N.A., et al., Defendants. |
| Court | U.S. District Court — District of Connecticut |
RULING AND ORDER ON PLAINTIFFS' MOTION FOR STAY PENDING APPEAL, DEFENDANTS' MOTIONS TO DISMISS, AND PLAINTIFFS' MOTIONS FOR LEAVE TO AMEND COMPLAINT
In this action, pro se Plaintiff Gordon Clark and the estate of Lillian J. Clark, Gordon Clark's deceased wife, allege violations of several federal, state, and common law rights stemming from Defendants' alleged actions in connection with the repossession of the Clarks' home. In short, the Amended Complaint alleges that through a series of actions Defendants Wells Fargo and Scott Powell (“the Wells Fargo Defendants”); Santander Bank, N.A., and Timothy Wennes, Pierre Habis, and Kenneth O'Neill (“the Santander Defendants”); and Bendett & McHugh P.C along with Adam L. Bendett, Jeffrey M. Knickerbocker, Mark A Piech, Joseph Abraham, and Dominick D. Neveux (“the Bendett Defendants”), worked collectively to unlawfully and fraudulently foreclose on the Clarks' home. Defendants have moved to dismiss the complaint in its entirety for various reasons. For the reasons detailed below the Court agrees with Defendants that the Amended Complaint must be dismissed. Plaintiffs have also moved for leave to amend their complaint; as the Court finds that the proposed amendments, and any amendments related to the conduct Plaintiffs allege, would be futile, Plaintiffs' motions for leave to file the proposed Second Amended Complaint are denied, but the Court will allow Plaintiffs leave to file a proposed Third Amended Complaint consistent with this ruling.
The facts alleged in the Amended Complaint, ECF No. 72, are accepted as true for the purpose of the present motion to dismiss.[1] See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court may also consider the attachments to the complaint in deciding a motion to dismiss. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002).
Gordon and Lillian Clark[2] were married for twenty-seven years before she passed away in October of 2020. Am. Compl., ECF No. 72 ¶ 1.[3] Prior to her death, Lillian owned a home located at 70 Elm Street in Enfield, Connecticut. Id., Ex. F. On March 21, 2008, Lillian obtained a home equity line of credit (“HELOC”) secured by a mortgage on the property. Id. The loan is presently owned by Santander. See Am. Compl. at 21 ¶ 4. Plaintiffs contend that the mortgage was defective because it did not contain a property description, though it identified the property as 70 Elm Street. Id. ¶ 28(3); id., Ex. F. On February 12, 2012, Plaintiff Clark filed a notice of lien in the amount of $300,000 against the property. Am. Compl., Ex. E.
On May 1, 2019, Santander Bank, N.A. sent a letter addressed to “Lillian Byron f/k/a Lillian Clark” stating that Santander had recently been notified by the Town of Enfield that Lillian was delinquent on property taxes, the payment of which was a term of Santander's HELOC loan. Id. ¶ 28(1); Am. Compl, Ex. C. The letter stated that, if a lump sum payment of $37,575.86 was not paid by May 20, 2019, Santander would “exercise its rights to accelerate the amount secured by the collateral and institute a lawsuit to foreclose on the collateral.” Id. According to Plaintiffs, however, the Clarks were current on their property taxes before this letter was sent. Id. ¶ 28(2).
Plaintiff repeatedly called, emailed, and mailed letters to Santander and its executives, including to Defendant Powell, who was at the time Santander's Chief Executive Officer and later became Wells Fargo's Chief Operating Officer, and the other individual Santander Defendants, demanding that the erroneous foreclosure letter be withdrawn, but Santander would not withdraw it. Id. at 22 ¶¶ 9-10; id. at 1-2 ¶ 1; id. at 3 ¶ 4; id. at 4 ¶ 10.
Instead, on November 22, 2019, Santander Bank, NA (“Santander”) filed a complaint against Lillian in Connecticut Superior Court, seeking reformation of the mortgage issued on the home, as well as foreclosure of that mortgage. Id. ¶¶ 26-27. Because Plaintiff had a lien on the property, he was also named as a co-defendant in the foreclosure action. See Santander Bank N.A. v. Lillian Clark, et al., Connecticut Superior Court, Housing Session, Case No. HHD-CV19-6120472-S. Plaintiffs contend that this action was filed despite Lillian never having missed a payment on the mortgage, id. ¶ 28(1), and despite that Santander did not have a valid interest in the property, id. ¶ 28(3). Plaintiff alleges he has a valid and secured first lien on the property ahead of Santander. Id. ¶ 28(4). Plaintiffs further allege that Defendant Bendett & McHugh, as well as several of its attorneys named in this lawsuit (Defendants Adam Bendett, Jeffrey Knickerbocker, Dominick Neveux, Joseph Abraham, and Mark Piech), knew that the foreclosure suit was meritless, yet proceed anyway. Id. ¶¶ 29-30, 38. Lillian bequeathed her home to Plaintiff when she passed away in October of 2020, during the pendency of the state foreclosure suit. Id. at 12 ¶ 8.
On May 2-4, 2023, the Superior Court for the Judicial District of Hartford has held a trial in the underlying foreclosure action and entered judgment in favor of Santander, ordering a foreclosure by sale. See Santander Bank N.A. v. Lillian Clark, et al., HHD-CV-19-6120472S; ECF No. 195-3. The Connecticut Appellate Court has since affirmed this decision, dismissing the appeal as “frivolous.” Santander Bank N.A. v. Lillian Clark, et al., Appeal No. AC-46473; ECF No. 195-4 at 2.
Separately, the Amended Complaint alleges that Plaintiff submitted complaints to banking regulators about Defendants Wells Fargo and Powell allegedly committing financial fraud, and then was subsequently denied the opportunity to open two business checking accounts with Wells Fargo for no legitimate reason. Am. Compl., Counts Sixteen, Seventeen, & Eighteen, ¶¶ 3-6. Plaintiff was later able to open the accounts at another bank. Id. ¶ 7.
Although the Amended Complaint spans forty-three pages, this is the sum total of the relevant facts. To the extent any further information in the Amended Complaint is relevant to the Court's decision, it will be discussed below. Based on these facts, Plaintiffs have brought the following claims against all Defendants except Wells Fargo and, in certain instances, except Defendant Powell: theft of real property by financial fraud (Count One); negligence (Count Two); abuse of process (Count Three); and “gross, malicious, intentional, negligent, incompetent, reprehensible, unconscionable, and repeated infliction of physical, mental, and emotional distress” (Count Seven). Plaintiffs have also brought the following claims against the Santander Defendants: financial fraud, under 18 U.S.C. § 1005 (Count Four); mortgage fraud, under 18 U.S.C. § 1005 (Count Five); mail fraud, under 18 U.S.C. § 1341 (Count Six); age discrimination, under the Fair Housing Act, 42 U.S.C. §§ 3601-3631 et seq. (Count Eight); race discrimination, under the Fair Housing Act (Count Nine); redlining, under the Fair Housing Act (Count Ten); breach of contracts (Count Eleven); breach of oral contracts (Count Twelve); assumption of duty (Count Thirteen); breach of the covenant of good faith and fair dealing (Count Fourteen); violation of the Fair Debt Collection Practices Act (“FDCPA”) (Count Fifteen); and false advertising under the Lanham Act (Count Twenty-One). Plaintiffs allege the following claims against Powell and Wells Fargo: financial fraud, under 18 U.S.C. § 1005 (Count Sixteen); mail fraud, under 18 U.S.C. § 1341 (Count Seventeen); and retaliation by financial fraud, under 18 U.S.C. § 1005 (Count Eighteen). Finally, Plaintiffs allege a financial fraud claim under 18 U.S.C. § 1005 against the Bendett & McHugh Defendants (Count Nineteen), and a conspiracy to commit financial fraud claim under 18 U.S.C. § 1005 against all Defendants (Count Twenty).
Plaintiffs initiated this action in January of 2022, and then moved to stay the action because Plaintiff Clark was also litigating two related matters in Connecticut state court. ECF No. 44. The Court denied the motion for a stay, and Plaintiffs filed the operative Amended Complaint in April of 2022. ECF No. 72. All Defendants moved to dismiss the Amended Complaint. See ECF No. 82 (); ECF No. 83 (); ECF No. 87 (). In May of 2022, Plaintiffs moved for leave to file a Second Amended Complaint. ECF No. 108. These motions are addressed in this ruling.
Separately the Court sua sponte raised a concern about whether Plaintiff Clark, as a pro se litigant, could represent the Estate of Lillian Clark in this action, and requested briefing from the parties on this issue. See ECF No. 118. The Court concluded, both initially and upon reconsideration, that Plaintiff Clark could not represent the Estate of Lillian Clark pro se because, although he is the executor of the estate, the estate has beneficiaries and creditors other than Plaintiff Clark, under the broad definition of the term “creditor” in Connecticut law. ECF Nos. 133, 154, 159. The Court therefore ordered Plaintiff Clark to obtain legal representation for the Estate Plaintiff by November 18, 2022, or the claims brought by the Estate Plaintiff would be dismissed. ECF No. 154. The day before the dismissal was to take effect, Plaintiff Clark filed an interlocutory appeal of this issue, ECF No. 172, along with an “emergency” motion to stay the district court proceedings pending the outcome of the appeal, ECF No. 174. Given the filing of the...
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