Harris v. Citimortgage, Inc.

• Citation: 878 F.Supp.2d 154
• Decision Date: 19 July 2012
• Docket Number: Civil Action No. 11–1591 (BJR).
• Parties: Phillip HARRIS, Plaintiff, v. CITIMORTGAGE, INC., and Mortgage Electronic Registration System, Inc., Defendants.
• Court: U.S. District Court — District of Columbia

878 F.Supp.2d 154

Phillip HARRIS, Plaintiff,

v.CITIMORTGAGE, INC., and Mortgage Electronic Registration System, Inc., Defendants.

Civil Action No. 11–1591 (BJR).

United States District Court,

District of Columbia.

July 19, 2012.

Esthus Christopher Amos, Columbia, MD, for Plaintiff.

Jordan B. Segal, Morris Hardwick Schneider, Baltimore, MD, for Defendants.

Memorandum Opinion Granting in Part and Denying in Part Defendants' Motion to Dismiss

BARBARA J. ROTHSTEIN, District Judge.

This action arises from transactions surrounding the mortgage of Phillip Harris's residential property (“the property”), located at 1711 Stanton Terrace SE in the District of Columbia. Harris alleges that defendants CitiMortgage, Inc. (“CMI”) and Mortgage Electronic Registration System, Inc. (“MERS”) (collectively, “defendants”) violated the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., and the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2607 et seq., and committed various torts against him when they financed his purchase of the property. Harris seeks damages, an injunction against foreclosure and eviction, and release of all liens against the property. Before the court are [Dkt. 4, 5] defendants' motions to dismiss the complaint for failure to state a claim upon which relief can be granted.¹ Upon review of the motion, the opposition thereto, and the record of this case, the court concludes that defendants' motion must be granted in part and denied in part.

I. Factual Background

The following factual summary assumes Harris's allegations to be true. ²See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 589, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). On June 30, 2005, Harris purchased the property with a $220,000 loan from CMI. Compl. ¶¶ 4, 6, 25[b].³ “[A]t some point in time,” Harris defaulted on his debt obligation, id. ¶ 23, and the designated Trustee executed notices of default and sale before executing a trustee's deed in March 2009. After the default and before the commencement of foreclosure, Harris and CMI entered into loan modification negotiations. Harris avers that he was “led to believe a loan modification had been reached” and that he sent CMI a check for $3,500, as set forth in the alleged agreement. Id. ¶ 29. He claims that he sent the check in reliance on CMI's representations that such an agreement existed. Harris allegedly waited for the loan modification documents but never received them. After the foreclosure, CMI brought an action to evict Harris from the property. Id. ¶ 30.

According to Harris, fraud, misrepresentations and other illegal acts marked all stages of these transactions. He alleges that CMI, without his knowledge, overstated his assets, income, collateral and other financial information in order to qualify Harris for the mortgage. Id. ¶¶ 22, 25[b]. CMI also allegedly failed to provide Harris with a Consumer Handbook on Adjustable Rate Mortgages and to disclose to him the negative amortization characteristics of the Adjustable Rate Mortgage loan as well as the interest-only payment feature and other legal obligations, all in violation of TILA and RESPA. Id. ¶¶ 28 [b]–33[b]. In addition to asserting these statutory violations, Harris claims that defendants had no standing to foreclose on his property, that defendants were grossly negligent in failing to disclose material terms of the loan, and that they are liable for predatory lending. He also argues that defendants “willfully, wantonly and intentionally concealed these facts and/or documents” from him and that this concealment prevented him from discovering the illegal acts until July 2011. Id. ¶¶ 36[b]–37[b]; see also ¶¶ 79[b], 81 [b], 82[b]. In light of these alleged violations, Harris seeks an injunction against his eviction and defendants' profits earned through “unjust enrichment” as well as other damages.

Harris filed his lawsuit in the Superior Court of the District of Columbia on July 19, 2011. Defendants removed this matter to this Court on September 1, 2011. They now move to dismiss Harris's complaint for failure to state a claim upon which this court can grant relief.

II. Legal Standard

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). When reviewing a motion to dismiss pursuant to Rule 12(b)(6), a court must accept as true all factual allegations contained in the complaint, and the plaintiff should receive the benefit of all favorable inferences that can be drawn from the facts alleged. See Equal Em't Opportunity Comm'n v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624–25 n. 3 (D.C.Cir.1997).

The Federal Rules of Civil Procedure require only that a complaint contain “ ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ ” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). However, a plaintiff must set forth in the complaint “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). “[C]ontent that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged” meets this plausibility requirement. Id. Although “detailed factual allegations” are not necessary to survive a Rule 12(b)(6) motion to dismiss, a plaintiff must furnish “more than labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. A complaint does not suffice “if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955).

The defendant bears the burden of proving the plaintiff has failed to articulate a claim upon which relief could be granted. Kundratic v. Thomas, 407 Fed.Appx. 625, 626–27 (3d Cir.2011) (citing Gould Elecs., Inc. v. United States, 220 F.3d 169, 178 (3d Cir.2000)); 5B Fed. Prac. & Pro. Civ. § 1357 (3d ed.) (“All federal courts are in agreement that the burden is on the moving party to prove that no legally cognizable claim for relief exists.”).

III. Analysis

A. TILA

Defendants contend that this court lacks subject matter jurisdiction over Harris's TILA claim because he did not file his complaint “within one year from the date of the occurrence of the [alleged] violation,” i.e., within one year of closing, as required under § 1640(e) of TILA. See15 U.S.C. § 1640(e). They root their argument in the premise that TILA's statute of limitations is a jurisdictional prerequisite and that, as a result, the court cannot equitably toll the limitations period.⁴ Harrisdisagrees with this proposition, contending that § 1640(e) is not jurisdictional. Harris further argues that he is entitled to equitable tolling because the defendants concealed their alleged misdeeds from him. The Court agrees with Harris on both counts and addresses them in turn.

1. State of Limitations and Jurisdiction

Although the doctrine of equitable tolling “is read into every federal statute of limitations,” Holmberg v. Armbrecht, 327 U.S. 392, 396–97, 66 S.Ct. 582, 90 L.Ed. 743 (1946), “Congress can set jurisdictional time prerequisites to the entertainment of federal claims.” Hardin v. City Title & Escrow Co., 797 F.2d 1037, 1040 (D.C.Cir.1986). The D.C. Circuit has not yet addressed the question of whether TILA's limitations provision, 15 U.S.C. § 1640(e), is jurisdictional. In deciding this issue, the fundamental inquiry is what Congress intended when it drafted the statute. Hardin, 797 F.2d at 1040–41;King v. California, 784 F.2d 910, 914–15 (9th Cir.1986); Jones v. TransOhio Sav. Ass'n, 747 F.2d 1037, 1040–41 (6th Cir.1984). In Arbaugh v. Y & H Corp., 546 U.S. 500, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006), the Supreme Court adopted a “clear statement” rule for determining whether a statutory prerequisite to suit is jurisdictional:

If the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue. But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.

Id. at 515–16, 126 S.Ct. 1235 (citation omitted).

More recently, the D.C. Circuit addressed this issue in the context of exhaustion of remedies. In Blackmon–Malloy v. U.S. Capitol Police Bd, it found that, in light of Arbaugh, “direct statutory language” is necessary to hold a statutory requirement jurisdictional. Blackmon–Malloy v. U.S. Capitol Police Bd., 575 F.3d 699, 705 (D.C.Cir.2009) (“To make compliance with a statutory provision a prerequisite to federal jurisdiction, a statute must include ‘direct statutory language indicating that there is no federal jurisdiction prior to [such compliance].’ ”) (quoting Avocados Plus, Inc. v. Veneman, 370 F.3d 1243, 1248 (D.C.Cir.2004)) (brackets in original).

Applying this “clear statement” rule to § 1640(e) of TILA, this Court does not find unambiguous Congressional intent to link jurisdiction and the limitations period. In full, the section provides:

(e) Jurisdiction of courts; limitations on actions; State attorney general enforcement

Any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation.... This subsection does not bar a person from...