Davis v. Wells Fargo U.S. Bank Nat'Lass'N

Decision Date08 June 2015
Docket NumberCIVIL ACTION NO. 14-07014
CourtU.S. District Court — Eastern District of Pennsylvania



Plaintiff Michael Earl Davis ("Davis") brings multiple claims against Wells Fargo U.S. Bank National Association as Trustee for the Structured Asset Investment Loan Trust, 2005-11 ("Wells Fargo")1 and Assurant, Inc. ("Assurant"). All of his claims stem from a mortgage on a property he owned, force placed insurance on the property, and unrepaired or negligently repaired damage to the property. Davis, however, has already sued Wells Fargo for causes of action based on substantially the same facts that serve as the foundation of his claims here. Claim preclusion bars his subsequent suit, and the Court dismisses Davis' claims against Wells Fargo. Furthermore, Davis sues Assurant even though he fails to show how Assurant was involved in the alleged conduct in any way, other than being the parent company of the company that insured Davis' property. Long-standing tenets of corporate law preclude parent company liability for the acts of its subsidiaries absent reasons to disregard the corporate form. Davis presents no such reasons here. Davis therefore lacks standing to assert his claims againstAssurant, and the Court dismisses those claims for lack of subject matter jurisdiction. Finally, Davis requests leave to add additional defendants, some of which are non-diverse. Addition of these defendants, combined with dismissal of the claims against Wells Fargo and Assurant, would leave the Court with no basis for subject matter jurisdiction. Consequently, the Court must deny Davis' request.

Factual & Procedural Background

On July 29, 2005, Davis executed a mortgage for the property located at 4015 Green Street in Philadelphia (the "Property") to BNC Mortgage, Inc. (Am. Compl. ¶ 5, Doc. No. 10.) On January 5, 2008, Wells Fargo locked Davis out of the Property. (Id. ¶ 7.) It commenced a foreclosure action against Davis in state court three weeks later. (Id. ¶ 8.) Two weeks after Wells Fargo initiated the foreclosure action, Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for BMC Mortgage, Inc., purported to assign Davis' mortgage on the Property to Wells Fargo. (Id. ¶ 9, 10.) The assignment was recorded on February 20, 2008. (Id. ¶ 11.) Wells Fargo eventually obtained a default judgment in the foreclosure action.

Davis is a Lieutenant Colonel in the United States Army Reserve. (See id. ¶ 12.) In September 2008, while the foreclosure action was ongoing, Davis was ordered to active duty effective October 1, 2008. (Id.) Davis immediately provided a copy of his military orders to Wells Fargo and reported to active duty as ordered. (Id. ¶¶ 12, 13.) In December 2008, shortly after Davis reported to active duty, Wells Fargo filed a motion to vacate the judgment in the foreclosure action. (Id. ¶ 14.) Davis remained on active duty until October 1, 2011. (Id. ¶ 13.)

Wells Fargo, through Assurant, put force placed insurance on the Property in April 2009. (Id. ¶ 17.) Davis alleges that this insurance was "excessive" and carried an exorbitant premium. (Id.) He further alleges that Wells Fargo and Assurant had an illicit agreement through whichAssurant would be Wells Fargo's exclusive provider of force placed insurance. (Id. ¶ 88.) In exchange for this exclusive right, Assurant would charge excessive premiums and kick back a portion of this excess to Wells Fargo as a "commission." (Id. ¶¶ 88, 90.) Davis alleges that the forced placed policy on his Property was part of this scheme.

On October 12, 2011, just after Davis had returned from active duty, MERS, as nominee for BNC Mortgage, Inc. purported again to assign Davis' mortgage on the Property to Wells Fargo, despite the fact that BNC Mortgage, Inc. had filed for bankruptcy nearly three years prior. (Id. ¶¶ 15, 18.) Shortly thereafter, Wells Fargo inspected the Property and discovered a roof leak that was damaging the ceiling, wall, and floor in the master bedroom. (Id. ¶ 19.) Wells Fargo filed a claim with Assurant with regard to the damage. (Id. ¶ 20.) Mike Campanella of American Security Insurance Company ("ASIC") inspected the Property and provided a damage estimate report. (Id. ¶ 21.) Wells Fargo and Assurant settled the claim for $317, but Wells Fargo never repaired the roof leak or the damage to the master bedroom. (Id. ¶¶ 22-24.) The Property continued to deteriorate. (Id.)

Nearly a year later, Davis received a violation notice from the City of Philadelphia stating that the Property was in an unsafe condition. (Id. ¶ 25, Ex. 11.) The notice stated that the rear wall of the third floor was partially collapsed. (Id.) Upon receiving the notice, Davis wrote to Wells Fargo and requested entry into the Property. (Id. ¶ 26.) Wells Fargo sent Davis the keys to the Property several days later. (Id. ¶ 27.) Davis then filed a claim with Assurant regarding the roof leak and damage to the back wall. (Id. ¶ 28.) He did not know that Wells Fargo had previously filed a claim for the same damage. (Id. ¶ 29.) He only became aware of the prior claim when Assurant denied his claim on October 28, 2012. (Id. ¶ 32.) When Davis received thedenial letter, he became aware that "Wells Fargo's Forced Placed Insurance was a sham . . . ." (Pl.'s Mem. Opp'n Wells Fargo Mot. Dismiss at 11, Doc. No. 28-1.)

Ten days before Davis' insurance claim was denied, Davis sued Wells Fargo in federal court. (E.D. Pa. Case No. 12-cv-05943.) Davis amended his complaint in that case on December 7, 2012. (Id., Doc. No. 10.) Davis asserted claims against Wells Fargo for trespass and violation of the Service Members Civil Relief Act ("SCRA"). (Am. Comp. ¶ 30.) On January 24, 2013, Judge Savage dismissed Davis' SCRA claim and declined to exercise supplemental jurisdiction over his trespass claim. (See id. ¶ 34.) Judge Savage noted that Davis would not be barred from reasserting his trespass claim in state court on statute of limitations grounds if he were to "promptly file[] a certified transcript of the judgment and pleadings filed in this action." (Mem. Opinion at 2 n.1, Case No. 12-cv-05943, Doc. No. 22.); see also 42 Pa.C.S. § 5103(b).

Davis initiated this action on December 11, 2014. He filed an amended complaint on February 4, 2015. The amended complaint asserts claims for trespass (Count I), breach of contract (Count II), negligence (Count IV), fraud (Count VI), loss of rental income (Count VIII), breach of the implied covenant of good faith and fair dealing (Count X), and violation of the anti-tying provision of the Bank Holding Company Act, 12 U.S.C. § 1972, (Count XI) against Wells Fargo. It asserts claims for breach of contract (Count III), negligence (Count V), fraud (Count VI), bad faith (Count VII), loss of rental income (Count VIII), and violation of the anti-tying provision of the Bank Holding Company Act (Count XI) against Assurant. Finally, the amended complaint requests that the Court set aside the mortgage assignments to Wells Fargo as fraudulent (Count IX).

Shortly after filing the amended complaint, Davis filed a motion to add additional defendants under Rule 20 of the Federal Rules of Civil Procedure. (Doc. No. 13.) Davis proposes to add as defendants MERS, the attorney who signed the first mortgage assignment on behalf of MERS, and that attorney's law firm. (See id.) Both Wells Fargo and Assurant filed motions to dismiss the amended complaint. (Doc. Nos. 18, 35.) All three motions are fully briefed and ripe for decision. The Court grants Wells Fargo and Assurant's motions and denies Davis' motion.

Davis' Claims against Assurant

Assurant moves to dismiss Davis' complaint on multiple grounds, among them that subject matter jurisdiction is lacking and dismissal is proper pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. A Rule 12(b)(1) motion can present either a facial attack or a factual attack on the Court's jurisdiction. Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). When considering a facial attack, the Court "must consider the allegations of the complaint as true." Id. When considering a factual attack, "no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Id.

Here, Assurant presents a factual attack on the Court's jurisdiction, arguing that Davis lacks Article III standing to maintain his claims against Assurant. "Absent Article III standing, a federal court does not have subject matter jurisdiction to address a plaintiff's claims, and they must be dismissed." Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006). To satisfy Article III standing, a plaintiff must show: (1) the invasion of a concrete and particularized legally protected interest and resulting injury in fact that is actual or imminent, notconjectural or hypothetical; (2) a causal connection between the injury and the conduct complained of, meaning that the injury must be fairly traceable to the challenged action of the defendant; and (3) it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 278 (3d Cir. 2014). "The party invoking federal jurisdiction bears the burden of establishing these elements." Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).

Assurant attacks Davis' claims on both the causation and redressability elements of standing. In support of its argument, Assurant submits a declaration stating that it is a holding company with a separate corporate existence from ASIC, that it is not involved in ASIC's daily business operations, that it has never sold or underwritten...

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