In re Angulo, Bankruptcy No. 09-14944 (Bankr. E.D. Pa. 4/23/2010), Bankruptcy No. 09-14944.
| Decision Date | 23 April 2010 |
| Docket Number | Bankruptcy No. 09-14944.,Adversary No. 09-0389. |
| Parties | In re SANDRA J. ANGULO, Chapter 13, Debtor. SANDRA J. ANGULO Plaintiff, v. EMIGRANT MORTGAGE COMPANY and RETAINED REALTY, INC. Defendant. |
| Court | United States Bankruptcy Courts. Third Circuit. U.S. Bankruptcy Court — Eastern District of Pennsylvania |
Before me is the defendants' joint motion to dismiss the above-captioned adversary proceeding filed against them by the debtor/plaintiff. The plaintiff, Ms. Sandra Angulo, sets out six counts in connection with a note and mortgage originated by Emigrant Mortgage Company. After Emigrant obtained a foreclosure judgment, it assigned that judgment to the use of Retained Realty, Inc., identified as its subsidiary. Prior to a scheduled foreclosure sale of the debtor's real property, the debtor filed this chapter 13 bankruptcy case.
Thereafter, the debtor filed a "complaint objecting to the proof of claim of Emigrant Mortgage Company, claim #1, which has been replaced by proof of claim of Retained Realty, claim #10. . . ." In addition, the debtor's complaint purportedly seeks a determination of the extent and validity of the lien held by Retained Realty, as well as damages and "equitable relief." See generally Fed. R. Bankr. P. 7001; Fed. R. Bankr. P. 3007(b) ().
The defendants now contend that the debtor has failed to state any cause of action in her complaint. The debtor disagrees.
The defendants seek to dismiss the instant complaint under Fed. R. Bankr. P. 7012, which procedural rule incorporates, inter alia, Fed. R. Civ. P. 12(b)(6). Recently, the Supreme Court explained the standard for determining whether a complaint states a cause of action, thus entitling the plaintiff to proceed to discovery and possibly to trial.
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." [Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955 (2007)]. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id., at 556, 127 S. Ct. 1955. The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. Ibid. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of `entitlement to relief.'" Id., at 557, 127 S. Ct. 1955 (brackets omitted).
Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id., at 555, 127 S. Ct. 1955 (). Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556, 127 S. Ct. 1955. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. [Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007.] But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not "show[n]"—"that the pleader is entitled to relief." Fed. Rule Civ. Proc. 8(a)(2).
In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009).
Therefore, I shall accept the debtors' factual allegations as true, as well as all reasonable inferences that may be drawn from those allegations. If, nonetheless, this complaint fails to meet the pleading standard set forth in Iqbal, dismissal is warranted, see, e.g., Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); In re Joubert, 411 F.3d 452 (3d Cir. 2005); Ransom v. Marrazzo, 848 F.2d 398, 401 (3d Cir. 1988), unless leave to amend is appropriate. See, e.g., Jones v. Domalakes, 161 Fed. Appx. 216, 217 (3d Cir. 2006) (non-precedential); Chemtech Intern., Inc. v. Chemical Injection Technologies, Inc., 170 Fed. Appx. 805, 811 (3d Cir. 2006) () (quoting Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002)); Griffin-El v. Beard, 2009 WL 1229599, at *6 (E.D. Pa. 2009). Where, however, repleading could not correct the defects in a party's claim, a court need not grant leave to amend. See e.g., Alston v. Parker, 363 F.3d 229, 235 (3d Cir. 2004) (); Peterson v. Philadelphia Stock Exchange, 717 F. Supp. 332, 337 (E.D. Pa. 1989); see also Massarsky v. General Motors Corp., 706 F.2d 111, 125 (3d Cir. 1983); Sarfaty v. Nowak, 369 F.2d 256, 259 (7th Cir. 1966) ().
I further note that under Fed. R. Civ. P. 12(d) (also incorporated by Fed. R. Bankr. P. 7012):
If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.
The following relevant allegations are included in the debtor's complaint, or are contained in exhibits that may be considered in the context of a motion to dismiss.
The plaintiff is the owner of the residential property located at 5711 Anderson Street, Philadelphia, Pennsylvania. Complaint, ¶ 18. She inherited the property upon the death of her mother in July 2002. Id., ¶ 19.
On May 25, 2005, Ms. Angulo and Emigrant executed a note and mortgage (both with riders), in the amount of $56,925.00. Id., ¶ 23; see also ex. C (Adjustable Rate Note and Mortgage). On June 30, 2008, Emigrant obtained a judgment in mortgage foreclosure for $69,056.33, which included a per diem charge of $16.71 through October 7, 2008. Complaint, ¶ 34.1
"On November 6, 2008, the parties attended a conciliation conference before a judge pro tem (`JPT'), as provided for under the Mortgage Foreclosure Diversion program, pursuant to Joint General Court Regulation No. 2008-001 of the Philadelphia Court of Common Pleas." Complaint, ¶ 35. "Emigrant represented to the JPT that the outstanding principal at that time was $71,264.54, and the JPT recommended a loan modification be crafted with an outstanding principal of $68,264.54, in consideration of Ms. Angulo tendering a $3,000 payment to Emigrant." Id., ¶ 37.2 This recommendation was conditioned upon a future appraisal demonstrating a loan to value ratio of 70%. A further conciliation conference was scheduled to give Emigrant an opportunity to consider this recommendation. Debtor's Reply to Motion to Dismiss, ex. B.3
On December 11, 2008, the additional conciliation conference was held. The debtor alleges that the state court thereafter entered an order that the parties had reached an agreement upon the terms outlined in the JPT's recommendation of November 6, 2008. Complaint, ¶ 38. The December 11th order, referred to in the complaint as exhibit F but only attached as exhibit C to the debtor's response to the defendants' motion, reads as follows:
An agreement was reached. Sheriff Sale is postponed to 2/13/09 to enable the parties to finalize the Agreement. If no Agreement is reached by the above date, the Sheriff shall sell the premises unless otherwise ordered by the Court or by the Plaintiff.
On December 16, 2008, Emigrant acknowledged that it had received the $3,000 that Ms. Angulo "tendered to Emigrant in good faith consideration for an affordable loan modification." Complaint, ¶ 39.4
The debtor's complaint does not address the February 13, 2009 deadline mentioned in the December 11, 2008 state court order. She next asserts that "[i]n April 2009, rather than carrying out the terms agreed upon by the parties in December 2008 and affirmed by the state court, Emigrant proposed a different loan modification with onerous terms." Id., ¶ 40.5 In the loan modification proposed by Emigrant, the outstanding indebtedness was purported to be $81,487.47.6 Id., ¶ 42. Ms. Angulo also complains that Emigrant failed to account for the $3,000 payment she made, id., ¶ 43, and that the outstanding debt demanded by Emigrant was "far in excess of the amount that could be calculated from the re-assessed damages authorized by the ...
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