Giannasca v. Bank of Am.

Decision Date19 November 2018
Docket NumberCivil No. ELH-17-2110
CourtU.S. District Court — District of Maryland

Plaintiff Edward V. Giannasca, II, who is self-represented, filed suit against a host of defendants, alleging fraud in connection with a construction loan and a mortgage. ECF 2 ("Complaint").1 In an amended complaint (ECF 24-1, "Amended Complaint"), he alleged "financial fraud" and "mortgage fraud" related to a first mortgage of $1.5 million with respect to his family farm in Street, Maryland. ECF 24-1 at 5. Several exhibits are appended to the suit.See ECF 24-2 to 24-8.

Giannasca and New Penn Financial, LLC d/b/a/ Shellpoint Mortgage Servicing ("Shellpoint"); V Mortgage REO 3, LLC ("V Mortgage); and Wilmington Trust, National Association ("Wilmington Trust"), in its capacity as a trustee for VM Trust Series 3, filed a "Joint Stipulation Of Dismissal With Prejudice" on March 6, 2018. ECF 33. On March 22, 2018, I granted the "Joint Stipulation." ECF 37.2

Plaintiff has not set forth any allegations or claims against the Doe defendants. Accordingly, I shall dismiss them from this case. See Pair v. Alexander, GLR-16-1492, 2018 WL 1583472, at*1 n.2 (Apr. 2, 2018) (dismissing claims against Doe defendants on the ground the plaintiff "d[id] not raise specific allegations against the John Doe defendants").

Carrington Mortgage Services, LLC ("Carrington") was named as a defendant in the original Complaint. In the Amended Complaint, plaintiff added defendant J.P. Morgan Mortgage Acquisitions Corp. ("J.P. Morgan"). See ECF 24; ECF 24-1. According to the Docket, neither party was served. See Docket.

"In all cases removed from any State court to any district court . . . in which any . . . of the defendants has not been served with process . . . prior to removal, . . . such process or service may be completed or new process issued in the same manner as in cases originally filed in such districtcourt." 28 U.S.C. § 1448. Fed. R. Civ. P. 4(m) requires a plaintiff to serve a defendant "within 90 days after the complaint is filed." If any defendant is not served within that time, "the court . . . must dismiss the action without prejudice against that defendant or order that service be made within a specified time." Id.

Pursuant to 28 U.S.C. § 1448 and Fed. R. Civ. P. 4(m), plaintiff was required to serve Carrington by October 24, 2017, and to serve J.P. Morgan by December 4, 2017. Because plaintiff has not yet served these defendants, I shall dismiss the claims against them, without prejudice.

Defendants Bank of America, N.A. ("Bank of America" or "BOA"), Ruth Derewyanko, and Peter Kafouros have filed a joint motion to dismiss (ECF 31), supported by a memorandum of law (ECF 31-1) (collectively, "BOA Motion") and exhibits. See ECF 31-2 through ECF 31-6. Additionally, defendant Residential Credit Solutions, Inc. ("Residential") filed a motion to dismiss (ECF 34), along with a memorandum of law (ECF 34-1) (collectively, "Residential Motion") and an exhibit. See ECF 34-2. And, defendants Paul J. Moran, Esq. and Stern & Eisenberg Mid-Atlantic, PC ("Stern & Eisenberg") filed a joint motion to dismiss (ECF 35), along with a memorandum of law (ECF 35-1) (collectively, "Moran Motion"). Plaintiff opposes all of the motions. ECF 38; ECF 39; ECF 40 (collectively "Opposition"). Defendants have replied. ECF 41 ("BOA Reply"); ECF 42 ("Moran Reply"); ECF 43 ("Residential Reply").

No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons set forth below, I shall grant defendants' motions.

I. Factual Background3

This dispute concerns alleged fraud with regard to a construction loan and mortgage onGiannasca's family farm. In 2006, Giannasca applied to Bank of America for a $2 million construction loan and mortgage on a farm owned at the time by the Giannasca Family Farm, LLC ("GFF"). ECF 24-1 at 10.4 Giannasca intended to use the proceeds of the construction loan to satisfy a prior mortgage and to fund a construction project on the farm. Id. During the loan application process, he was assisted by Derewyanko, a BOA account executive. Id. After plaintiff submitted his loan application, he received Bank of America's $2 million loan documents, including a funding date and a first payment due date. Id. at 11. Derewyanko advised Giannasca to accelerate the construction renovations to ensure a $3 million BOA appraisal prior to funding the loan. Id. Giannasca did so, and the property was appraised at $3 million. Id.

In February 2007, Derewyanko advised Giannasca that the loan would be reduced to $1.5 million, due to "sweeping system-wide changes in [Bank of America's] loan products." Id. at 12. To make up for the shortfall, she suggested Giannasca increase his home equity line of credit. Id. She also informed Giannasca that the loan could not be made to GFF because it was a limited liability company, and that Giannasca would have to transfer the farm to himself to receive the loan. Id. Accordingly, Giannasca transferred the farm from GFF to himself, and the loan ultimately closed for $1.5 million on February 13, 2007. Id. at 6. However, BOA never approved an increase in Giannasca's home equity line of credit. As a result, a $500,000 financing shortfall remained for his construction project. Id.

Several liens were lodged against the farm, and Giannasca was sued by contractors engaged in the construction project. Id. at 13. Thus, Giannasca contends that his credit was ruined because BOA failed to lend the additional $500,000. Id. at 13-14.

The right to service the construction loan was subsequently released to other entities, including Carrington, Residential, and Shellpoint. Id. at 14. Giannasca ultimately defaulted on the loan and Shellpoint, through its attorneys, Moran and Stern & Eisenberg, initiated foreclosure proceedings. Id. at 15.

In addition, Giannasca references a "McCrary Action," alleging that the judgments in that action have prohibited him from refinancing the mortgage on his home and have contributed to his financial ruin. ECF 24-1 at 14-15. However, he fails to explain the nature of the "McCrary Action."

Giannasca also alleges that he suffered damages from the conduct of BOA and Kafouros, including, id. at 17:

(i) allowing the opening of the Crescent City bank account with improper documentation . . . , (ii) by allowing [Stuart C.] Fisher[5] to deposit a check for $5,000,000 dollars into a BOA account when the check was made payable to a non-existent corporation, (iii) by allowing Fisher to negotiate (deposit) the $5,000,000 check into an account when he was not a signatory or authorized user of that account, and (iv) allowing Fisher to make withdrawals from an account without any authority whatsoever to do so, (v) by allowing Fisher to deposit monies into personal accounts without the account owner[']s knowledge and control.

Presumably, the "Crescent City bank account" is related to Crescent City, LLC ("Crescent City"), in which plaintiff claims to hold a 50% interest. See id. at 20. Plaintiff asserts that Crescent City entered into a $5,700,000 settlement agreement with BOA in 2011 ("Crescent City settlement"). Id. Additionally, "Fisher" appears to have connections to Crescent City and Giannasca. See id. at 21. According to an unsigned affidavit of secured creditors of plaintiff, attached to the Complaint (ECF 2-2 at 21-32),6 Stuart C. Fisher "was personally responsible forsoliciting and delivering Bank of America, Palm Beach to the Giannasca Family's Farm in Harford County, Maryland." ECF 2-2 at 22.

Plaintiff avers that the Crescent City settlement resolved the case of Crescent City Estates, LLC v. Bank of America, N.A., CCB-08-3458 (ECF 24-1 at 20-21). On December 24, 2008, BOA removed that case to this Court from the Circuit Court for Baltimore City. See id. ECF 1.7 In that litigation, Crescent City alleged that BOA converted $11,000,000 by allowing Fisher to open a BOA account in Crescent City's name without authorization, and then depositing several checks payable to Crescent City into that account. See CCB-08-3458, ECF 2. The parties filed a stipulation of dismissal on June 1, 2011. See CCB-08-3458, ECF 105. The terms of the settlement agreement are not publicly available. See CCB-08-3458.

As noted, plaintiff asserts that he owns a 50% interest in Crescent City, LLC. ECF 24-1 at 20. But, he complains that he was not a party to the Crescent City settlement agreement, and only recently became aware of it. ECF 1 at 13-14. According to plaintiff, the Crescent City settlement agreement is central to his claim of conspiracy and collusion (Count Four) against BOA.

In May 2016, Giannasca and the Giannasca Family Farm, LLC filed a "Fraud Complaint" in the Circuit Court for Harford County against BOA, Kafouros, Derewyanko, Shellpoint, Residential, Carrington, Stern & Eisenberg, Gregory Mullen, Esq., and several Doe defendants.They alleged fraud in the inducement; breach of contract; negligence; negligent training and supervision; breach of common law duty of inquiry; breach of duty to disclose; tortious interference; flipping a troubled loan; lender fraud and misrepresentation; conspiracy; and collusion. The case was removed to this court in June 2016. See Giannasca v. Bank of America, N.A. et. al., JFM-16-2002, ECF 2. Judge Motz dismissed the case in January 2017, upon defendants' motions for failure to state a claim. Id., ECF 42. Giannasca then filed the case sub judice in the Circuit Court for Harford County (ECF 2), and in July 2017 the case was again removed to this Court and assigned initially to Judge Motz. ECF 1.8

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