Henok v. Chase Home Fin., LLC

• Decision Date: 16 January 2013
• Docket Number: Civil Action No. 12–336 (RWR).
• Citation: 915 F.Supp.2d 162
• Court: U.S. District Court — District of Columbia
• Parties: Araya HENOK, Plaintiff, v. CHASE HOME FINANCE, LLC, et al., Defendants.

915 F.Supp.2d 162

Araya HENOK, Plaintiff,

v.CHASE HOME FINANCE, LLC, et al., Defendants.

Civil Action No. 12–336 (RWR).

United States District Court,

District of Columbia.

Jan. 16, 2013.

Araya Henok, Washington, DC, pro se.

Jeffrey L. Tarkenton, Paul A. Kaplan, Todd D. Ross, Womble Carlyle Sandridge & Rice, PLLC, Washington, DC, Gregory Nelson Britto, Shapiro & Burson, LLP, Fairfax, VA, Matthew Cohen, Beiramee & Cohen PC, McLean, VA, for Defendants.

MEMORANDUM OPINION AND ORDER

RICHARD W. ROBERTS, District Judge.

Pro se plaintiff Araya Henok brings this action against Chase Home Finance, LLC (“Chase”), Shapiro & Burson, LLP (“Shapiro”), and Fannie Mae ¹, challenging the legality of the foreclosure on a property he owned on 16th Street N.E. in Washington, D.C. (“the property”). After the defendants moved for judgment on the pleadingsarguing that Henok's complaint failed to satisfy the pleading requirements under Federal Rule of Civil Procedure 8 and failed to state a claim for relief under Rule 12, Henok moved for leave to amend the complaint. Because the claims against Chase of breach of contract and violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605(e), in the amended complaint are adequately pled, the motion for leave to amend the complaint will be granted as to those claims, but denied for futility as to the remaining claims. Because Henok's motion for leave to amend will be granted in part and denied in part, the defendants' motions for judgment on the pleadings will be denied as moot.

BACKGROUND

Henok purchased the property in 2006 with financing from Chase. Pl.'s Mot. for Leave to Amend, Attachment (“Am. Compl.”) ¶ 6, Ex. 7. In August of 2009, Chase returned his monthly payment and “stated that [his] property [was] going into foreclosure.” Id. ¶ 8. That month, Henok asked Chase by phone and in writing how much to pay to bring his account current, and notified Chase in writing of his new mailing address. Id. ¶¶ 9–10, Ex. 1. Chase referred Henok to Shapiro for the cure figures, and Henok mailed Chase and Shapiro several more requests with each noting his current mailing address. Id. ¶¶ 11–14, Exs. 2–4. Henok received no replies to his letters. Id. ¶¶ 10–14.

Chase appointed John Burson and Gregory Britto as substitute foreclosure trustees under the deed of trust that secured Henok's mortgage. Id., Ex. 6. Shapiro filed with the Recorder of Deeds an October 15, 2009 notice of foreclosure sale, but did not send Henok's copy to the address Henok provided. Id., Counts 1, 15, 19, Ex. 5.² Fannie Mae bought the property in a foreclosure sale on November 18, 2009. Id. ¶ 15, Exs. 5–6. Britto filed with the Recorder of Deeds the trustees' deed of sale in March 2010. It represented that the notice of foreclosure sale had been mailed to Henok at his current address. Id., Ex. 6.

Henok filed a complaint in D.C. Superior Court challenging the foreclosure in February 2012. Henok's complaint asserts against Chase and Shapiro claims of breach of contract, breach of fiduciary duty, fraud, negligence, negligent misrepresentation, and a constitutional violation of the Fifth Amendment's takings clause. Compl., Counts 1–5, 7–10, 12–14. Henok's complaint also asserts that the trustees' deed was issued late and failed to satisfy the formal requisites of an instrument, and that the notice of foreclosure had expired at the time of the foreclosure. Id., Counts 6, 11, 15.

The defendants removed the case to federal court and answered the complaint. Chase and Fannie Mae moved for judgment on the pleadings arguing that Henok's complaint does not satisfy the pleading requirements of Rule 8 and that Henok's breach of contract, breach of fiduciary duty, fraud, negligent misrepresentation, and Fifth Amendment claims do not state a claim for relief under Rule 12.³ Mem. in Supp. of Mot. for J. on the Pleadings by Chase and Fannie Mae at 5–13. Additionally, the motion argued that Henok's other claims concerning the trustees' deed and the expiration of the notice of foreclosure were without merit. Id. at 13–14. Shapiro also moved for judgment on the pleadings adopting and incorporating the memorandum of law from Chase and Fannie Mae's motion. Shapiro's Mot. for J. on the Pleadings at 1.

Henok then moved for leave to amend his complaint. Read broadly, Henok's amended complaint adds common law claims of negligence and negligent misrepresentation, Am. Compl. at 19, Counts 2, 14, 19, and adds statutory claims of wrongful foreclosure under D.C.Code § 42–815.01 and failure to respond under 12 U.S.C. § 2605, id., Counts 1, 3, 9, 25. In addition, the amended complaint eliminates the Fifth Amendment claim. Shapiro opposes Henok's motion, arguing in part that allowing Henok's amended complaint would be futile because it does not state a claim for relief on any ground. Opp'n to Mot. for Leave to Amend Compl. ¶ 3.

DISCUSSION

A plaintiff may amend his complaint at this stage “only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). “A court should determine the propriety of amendment on a case by case basis, using a generous standard, and pro se complaints are construed with special liberality [.]” Commodore–Mensah v. Delta Air Lines, Inc., 842 F.Supp.2d 50, 52 (D.D.C.2012) (citations and internal quotation marks omitted). The burden is on the defendant to show that leave to file an amended complaint should be denied. Smith v. Café Asia, 598 F.Supp.2d 45, 48 (D.D.C.2009) (citing LaPrade v. Abramson, Civil Action No. 97–10(RWR), 2006 WL 3469532, at *3 (D.D.C. Nov. 29, 2006)). A district court should grant leave to amend a complaint “in the absence of undue delay, bad faith, undue prejudice to the opposing party, repeated failure to cure deficiencies, or futility.” Richardson v. United States, 193 F.3d 545, 548–49 (D.C.Cir.1999) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)). Allowing an amended complaint would be futile if the amended complaint would not survive a motion to dismiss. In re Interbank Funding Corp. Sec. Litig., 629 F.3d 213, 215 (D.C.Cir.2010) (citing Nat'l Wrestling Coaches Ass'n v. Dep't of Educ., 366 F.3d 930, 945 (D.C.Cir.2004)). When certain claims in the amended complaint are futile but other claims survive, courts have denied leave to amend in part with respect to the futile claims while allowing leave to amend in part with respect to the surviving claims. See Council on American–Islamic Relations Action Network, Inc. v. Gaubatz, 891 F.Supp.2d 13, 34–36 (D.D.C.2012); Driscoll v. George Washington Univ., –––F.Supp.2d ––––, ––––, Civil Action No. 12–690(ESH), 2012 WL 3900716 at *9 (D.D.C. Sept.10, 2012).

In considering a motion to dismiss, a court accepts well-pleaded factual allegations in the complaint as true and interprets them in the light most favorable to the plaintiff. NB ex rel. Peacock v. District of Columbia, 682 F.3d 77, 82 (D.C.Cir.2012) (citing In re Interbank Funding Corp. Sec. Litig., 629 F.3d at 216). In addition, “the Court must make a concerted effort to discern a cause of action from the record presented if an action is in fact discernable.” Howerton v. Ogletree, 466 F.Supp.2d 182, 183 (D.D.C.2006) (citing Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972)). However, unsupported inferences and “legal conclusions cast in the form of factual allegations” are insufficient to survive a motion to dismiss. Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002) (internal quotation marks omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The motion to dismiss may be granted if the facts alleged in the complaint “do not ‘raise a right to relief above the speculative level,’ or fail to ‘state a claim to relief that is plausible on its face.’ ” United States v. All Assets Held at Bank Julius Baer Co., Ltd., 772 F.Supp.2d 191, 197 (D.D.C.2011) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929).

I. BREACH OF CONTRACT

The gravamen of Henok's breach of contract claims is that Chase breached the terms of the mortgage note and the deed of trust by failing to provide to him at his current address the written notice of default and notice of foreclosure that Chase was required to provide. Am. Compl. ¶¶ 30–36, Counts 1, 4–9, 12.⁴ Under D.C. law, a claim of breach of contract includes four elements: “(1) a valid contract between the parties; (2) an obligation or duty arising out of the contract; (3) a breach of that duty; and (4) damages caused by breach.” Tsintolas Realty Co. v. Mendez, 984 A.2d 181, 187 (D.C.2009).

Here, the amended complaint amply pleads each element. Read liberally, it identifies the mortgage note and deed of trust as the contract breached. Am. Compl. ¶¶ 30–36. The D.C. Court of Appeals has recognized that “ ‘the note and the trust deed can be considered merely different parts of a single contract.’ ” Osbourne v. Capital City Mortg. Corp., 667 A.2d 1321, 1326 (D.C.1995) (quoting Yasuna v. Miller, 399 A.2d 68, 72 (D.C.1979)).⁵ In addition, citing the note and deed of trust, Henok alleges that Chase had a duty to send to him at his current address written notice of his loan default, of how to cure the default, and of the foreclosure sale that would follow any failure to cure the default. He asserts that Chase and its foreclosing agent Shapiro never provided him with the required written notice despite his requests to Chase and Shapiro for information about curing his default. See id., Exs. 1–4. Finally, Henok alleges damages arising from the foreclosure including the loss of his property, money, credit rating, surety bond, real estate business, and revenue. Id. at 19–20. While the parties may disagree as to whether the defendants sent proper notice of foreclosure, Henok's factual allegations in the amended complaint are sufficient to...