Galli v. Astoria Bank
| Decision Date | 27 September 2017 |
| Docket Number | 16-CV-3549 (SIL) |
| Parties | RICHARD GALLI, Plaintiff, v. ASTORIA BANK, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
Presently before the Court is Defendant Astoria Bank's ("Defendant") motion to dismiss for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) and for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). See Docket Entry ("DE") [18]. By way of Complaint dated June 28, 2016, Plaintiff Richard Galli ("Plaintiff" or "Galli") commenced this action, seeking, inter alia, to recover for Defendant's alleged violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq. and its implementing regulations, known as Regulation X, 12 C.F.R. §§ 1024.1-1024.41. See DE [1]. On December 13, 2016, Defendant filed the instant motion, which Plaintiff opposes. See DE [18], [19]. On April 16, 2017, Judge Azrack referred Astoria Bank's motion to this Court for a Report and Recommendation as to whether it should be granted. See DE [22]. On March 31, 2017, pursuant to 28 U.S.C. § 636(c), the parties filed an executed Notice, Consent, and Reference of a Civil Action to a Magistrate Judge, indicating their intention to have this Court "conduct all proceedings and order the entry of a final judgment," which Judge Azrack So Ordered on April 3, 2017. See DE [23, 24]. For the reasons set forth herein, Defendant's motion is granted in its entirety with prejudice.
Unless otherwise noted, the following facts are taken from Plaintiff's Complaint, and are accepted as true for purposes of the instant motion.
The gravamen of Plaintiff's claims is that, on March 24, 2016, Astoria Bank wrongfully foreclosed on a mortgage encumbering his family home, the real property located at 14 Glen Hollow Drive, E36, Holtsville, New York, 11742-2440 (the "Subject Property"). See Compl., DE [1], ¶¶ 22, 23. From January 10, 2014 until March 24, 2016, Defendant Astoria Bank was the owner and servicer of a note and security agreement (the "Loan") on the Subject Property. See id. ¶ 3. After a default on the Loan by Plaintiff Galli, Astoria Bank scheduled a foreclosure sale on the Subject Property for March 24, 2016. See id. ¶ 19. On or about January 15, 2016, after the foreclosure sale had already been scheduled, Galli, through his prior counsel, the Acocella Law Group, Inc. ("Acocella"), submitted a Home Affordable Modification Program ("HAMP") request to Defendant Astoria Bank to modify the terms of the Loan. See id. ¶ 18. Plaintiff alleges that, on January 29, 2016, Astoria Bank confirmed that a complete HAMP request had been received. See id.
On March 18, 2016, Acocella called counsel for Astoria Bank, Stern & Eisenberg, P.C. ("Stern"), and confirmed that the HAMP request was still pending and that the foreclosure sale had been postponed. Id. ¶ 21. On March 22,2016, Acocella called Stern and, once again, confirmed that the sale had been postponed. See id. ¶ 25. However, the next day, Acocella received an email from Stern stating that Astoria Bank was proceeding with the foreclosure sale on March 24, 2016. See id. ¶ 30. On March 24, 2016, at 10:36 a.m., the foreclosure sale was completed. See id. ¶ 33. That same day, at 10:59 a.m., Galli filed for emergency bankruptcy protection pursuant to Chapter 13 of the U.S. Bankruptcy Code. See id. ¶ 32.
On April 20, 2016, in an attempt to "fight the wrongful, fraudulent and illegal foreclosure," Plaintiff retained his current counsel who sent the following requests for information ("RFI") via certified mail to Astoria Bank seeking: (1) a reinstatement statement pursuant to 12 C.F.R. § 1026.36 of Regulation Z; (2) the transactional history for the life of the Loan pursuant to 12 C.F.R. § 1024.36 of Regulation X; and (3) the identity of the original owner, original servicer, current owner and current servicer of the Loan pursuant to 12 C.F.R. § 1024.36. On April 21, 2016, Galli, through his counsel, also sent a Notice of Error ("NOE") to Defendant pursuant to 12 C.F.R § 1024.36(c). See id. ¶¶ 36-44. After having failed to receive a written acknowledgment of the previously sent RFIs, Plaintiff sent an additional NOE on May 16, 2016. See id. ¶ 45. On June 6, 2016, Plaintiff received an unspecified acknowledgment of receipt of one of the RFIs. See id. ¶ 46. Galli alleges that, to date, Astoria Bank has not supplied any of the information that it was required to produce pursuant to the RFIs. See id. ¶ 46.
By way of Complaint dated June 28, 2016, Plaintiff commenced this action seeking to enforce provisions of Regulation X and obtain a temporary stay and preliminary injunction preventing Defendant from instituting eviction proceedings. See id. ¶ 7. Galli alleges that Astoria violated: (i) 12 C.F.R. § 1024.41(c)(1) by proceeding with a foreclosure sale without timely granting or rejecting a pending loss mitigation package ("First Cause of Action"); (ii) 12 C.F.R. § 1024.41(g) by proceeding with a foreclosure sale while Plaintiff's loss mitigation application was still pending ("Second Cause of Action"); (iii) 12 C.F.R. § 1024.36(c) by failing to provide written acknowledgment of receipt of an RFI requesting the original owner, current owner and servicer of the Loan ("Third Cause of Action"); (iv) 12 C.F.R. § 1024.36(c) by failing to provide written acknowledgment of receipt of an RFI requesting the complete transactional history of the Loan ("Fourth Cause of Action"); (v) 12 C.F.R. § 1024.36(c) by failing to provide written acknowledgment of receipt of an RFI requesting the current mortgage balance of the Loan ("Fifth Cause of Action"); (vi) 12 C.F.R. § 1024.36(c) by failing to provide written acknowledgment of receipt of an RFI requesting a reinstatement statement for the Loan ("Sixth Cause of Action"); (vii) 12 C.F.R. §1024.35(d) failing to provide written acknowledgment of receipt of the first NOE ("Seventh Cause of Action"); (viii) General Business Law § 349 by engaging in deceptive business, trade, or commerce acts and practices ("Eighth Cause of Action"); and (ix) New York State Department of Financial Services Regulations Part 419.3 ("Ninth Cause of Action"). See id. ¶¶ 66-140. In addition to actual and statutorydamages, Plaintiff seeks injunctive relief restraining Astoria Bank from evicting Galli from the Subject Property ("Tenth Cause of Action"). See id. ¶¶ 141-47. In response, on December 13, 2016, Defendant moved pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) for dismissal based on lack of subject matter jurisdiction and for failure to state a claim for which relief can be granted. See DE [18].
Pursuant to Article III, Section 2 of the United States Constitution, "the jurisdiction of the federal courts is limited to 'Cases' and 'Controversies,' which 'restricts the authority of the federal courts to resolving 'the legal rights of litigants in actual controversies.'" Amityville Mobile Home Civic Ass'n v. Town of Babylon, No. 14-CV-2369, 2015 WL 1412655, at *2 (E.D.N.Y. Mar. 26, 2015) (quoting Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 71 133 S. Ct. 1523, 1528 (2013)). In the absence of a case or controversy, Fed. R. Civ. P. 12(b)(1) "provides that a party may move to dismiss a case for lack of subject matter jurisdiction." Amityville Mobile Home Civic Ass'n, 2015 WL 1412655, at *3; see also Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) (). The Second Circuit has held that, "[t]he hallmark of a case or controversy is the presence of adverse interests between parties who have a substantial personal stake in the outcome of the litigation." Evans v.Lynn, 537 F.2d 571, 591 (2d Cir. 1975). Therefore, to survive a defendant's motion to dismiss for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1), "a plaintiff must allege facts 'that affirmatively and plausibly suggest that it has standing to sue.'" Brady v. Basic Research, L.L.C., 101 F. Supp. 3d 217, 227 (E.D.N.Y. 2015) (quoting Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011)); see also City of New York v. Milhelm Attea & Bros., Inc., 550 F. Supp. 2d 332, 340 (E.D.N.Y. 2008) () (quoting All. for Envtl. Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82, 88 n.6 (2d Cir. 2006)).
In deciding a motion to dismiss for lack of subject matter jurisdiction, "a court must accept as true all material factual allegations in the complaint and refrain from drawing inferences in favor of the party contesting jurisdiction." U.S. ex rel. Phipps v. Comprehensive Cmty. Dev. Corp., 152 F. Supp. 2d 443, 449 (S.D.N.Y. 2001). However, "[w]here subject matter jurisdiction is challenged, . . . a court may consider materials outside the pleadings, such as affidavits, documents and testimony." Id.; see also Pyramid Crossgates Co., 436 F.3d at 88 n.8 (); Forbes v. State Univ. of New York at Stony Brook, 259 F. Supp. 2d 227, 231-32 (E.D.N.Y. 2003) (). The party advocating jurisdiction bears the burden ofestablishing its existence by a preponderance of the evidence. See In re Jesup & Lamont, Inc., No. 12-1169, 2012 WL 3822135, at *2 (S.D.N.Y. Sept. 4, 2012).
To survive a motion to dismiss pursuant to Rule 12(b)(6), a...
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