In re Padilla
Decision Date | 30 June 2008 |
Docket Number | Bankruptcy No. 98-18621ELF.,Adversary No. 07-0156. |
Citation | 389 B.R. 409 |
Parties | In re Irene PADILLA, Debtor. Irene Padilla, Plaintiff, v. GMAC Mortgage Corporation, Defendant. |
Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
Carol B. McCullough, McCullough & Eisenberg PC, Warminister, PA, for Plaintiff.
Louis W. Schack, Reed Smith Shaw & McClay LLP, Philadelphia, PA, for Defendant.
Plaintiff-Debtor Irene Padilla ("the Debtor") initiated the above adversary proceeding against Defendant GMAC Mortgage Corporation ("GMACM") as a class action. The Debtor alleges that GMACM, a mortgage servicer, violated, on a systemic basis, the rights of debtors in chapter 13 bankruptcy cases that were "confirmed, completed and discharged" in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania. More specifically, the Debtor alleges that, after the entry of the debtors' chapter 13 discharges, GMACM regularly demanded payment of attorney's fees incurred: (1) prepetition and (2) postpetition/pre-confirmation. The Debtor complains that GMACM's conduct violates the Bankruptcy Code in various ways. The Debtor seeks restitution, disgorgement, interest, punitive damages, attorney's fees and costs. Presently pending before the court is GMACM's Motion to Dismiss the Amended Class Action Adversary Complaint, Or, In the Alternative, To Strike Class Claims ("the Motion").
For the reasons explained below, the Motion will be granted in large part. All but one of the Debtor's claims will be dismissed and all of the class allegations will be stricken with respect to the dismissed claims. The Motion will be denied with respect to one (1) claim asserted by the Debtor and, in regard to that claim, the Debtor will be required to seek certification of a class "[a]t an early practicable time." See Fed.R.Civ.P. 23(c)(1)(A) (incorporated by Fed. R. Bankr.P. 7023).
On July 7, 1998, the Debtor filed this chapter 13 bankruptcy case. On February 23, 1999, the court entered an Order confirming the Debtor's proposed chapter 13 plan. On August 22, 2002, the court entered an Order discharging the Debtor. The bankruptcy case was closed on August 27, 2002.
On July 8, 2005, nearly three (3) years after the case was closed, the Debtor filed a motion to reopen her chapter 13 bankruptcy case so that she might initiate an adversary proceeding against GMACM asserting various claims arising from GMACM's alleged violation of the terms of her confirmed plan and her chapter 13 discharge order. The Debtor also asserted that GMACM's alleged misconduct was pervasive, making it appropriate to permit the proposed adversary proceeding to proceed as a class action. GMACM filed a response to the motion on August 15, 2005. After several continuances, a hearing was held on September 13, 2005. By Order dated October 12, 2005, the court denied the motion to reopen.1 However, the court granted the Debtor the opportunity to conduct certain "narrowly tailored" discovery and to file an amended motion to reopen by January 11, 2006.
On January 11, 2006, the Debtor filed an amended motion to reopen this case. For unknown reasons, that motion was withdrawn and re-filed, again styled as an amended motion to reopen the case, on January 23, 2006. GMACM filed a response to the (second) amended motion. By Order dated March 26, 2007, after a hearing and extensive briefing, I granted the motion to reopen and gave the Debtor until April 20, 2007 in which to file an adversary complaint. See In re Padilla, 365 B.R. 492 (Bankr.E.D.Pa.2007).
On April 19, 2007, the Debtor filed an adversary complaint asserting claims on her own behalf and on behalf of a purported class of former bankruptcy debtors. On July 19, 2007, after GMACM filed a motion to dismiss the complaint under Fed. R. Bankr.P. 7012 and Fed.R.Civ.P. 12(b)(6), the Debtor filed an amended complaint (hereafter, "the Amended Complaint"). On August 27, 2007, GMACM renewed its effort to terminate the litigation by filing the Motion. Both parties filed memoranda of law in support of their positions and a hearing on the Motion was held on October 25, 2007.
In deciding a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief may be granted, the court must accept all of the plaintiffs factual allegations as true and reasonable inferences therefrom in the light most favorable to the plaintiff. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984); Taliaferro v. Darby Township Zoning Board, 458 F.3d 181, 188 (3d Cir.2006). Dismissal is appropriate only if, accepting as true all facts alleged in the complaint, the plaintiff has not pled "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, ___ U.S. ___, ___, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007).
One Court of Appeals has described the standards a complaint must satisfy as follows:
the complaint must [first] describe the claim in sufficient detail to give the defendant "fair notice of what the ... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1[9]55, 1964 (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Second, its allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a "speculative level"; if they do not, the plaintiff pleads itself out of court. Bell Atlantic, 127 S.Ct. at 1[9]65, 1973 n. 14.
E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir....
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