Infante v. Bank Of Am. Corp.

• Decision Date: 18 December 2009
• Docket Number: Case No. 09-21586-CIV
• Citation: 680 F.Supp.2d 1298
• Parties: Pedro INFANTE, Plaintiff, v. BANK OF AMERICA CORP., Defendant.
• Court: U.S. District Court — Southern District of Florida

680 F.Supp.2d 1298

Pedro INFANTE, Plaintiff,

v.BANK OF AMERICA CORP., Defendant.

Case No. 09-21586-CIV

United States District Court, S.D. Florida.

Decided: Dec. 18, 2009.

Order Denying Reconsideration

Jan. 19, 2010.

COPYRIGHT MATERIAL OMITTED

John Hasan Ruiz, Joseph Lawrence McGuinness, Karen Jill Barnet-Backer Jessica B. Reyes, John H. Ruiz PA, Miami FL, for Plaintiff.

Eric Shaun Matthew, Jeffrey Alan Trinz, Akerman Senterfitt, Miami, FL William Patrick Heller, Akerman Senterfitt & Eidson, Fort Lauderdale, FL, for Defendant.

ORDER GRANTING MOTION TO DISMISS PLAINTIFF'S SECOND AMENDED COMPLAINT [DE 32] CLOSING CASE

ALAN S. GOLD, District Judge. I. Introduction

THIS CAUSE is before the Court upon Defendant's Motion to Dismiss Plaintiffs Second Amended Complaint [DE 32] ("Motion"), filed November 16, 2009.¹ In his Second Amended Complaint [DE 28] Plaintiff asserts two causes of action: Count I—Fraud, and Count II—Rescission Pursuant to 15 U.S.C. § 1635. Defendant now moves to dismiss both counts with prejudice on the basis that Plaintiff has failed to state a claim upon which relief can be granted and has also failed to meet the applicable pleading standards. I have jurisdiction pursuant to 28 U.S.C. § § 1331, 1332, and 1367(a). Having considered the motion, Plaintiffs response, Defendant's reply, the record, the relevant case law, the oral arguments of the parties, and being otherwise fully advised, I grant Defendant's Motion as to both counts for the reasons that follow.

II. Background²

Plaintiff Pedro Infante ("Plaintiff or "Infante") is an individual and the current owner of a parcel of property located in Coconut Grove, Florida ("the property"). [DE 28, ¶ 5]. In October of 2007, Plaintiff closed on two mortgage loans whereby Countrywide Bank, FSB ("Countrywide"), a corporate entity that has since been purchased by Defendant Bank of America ("Defendant" or "Bank of America"), agreed to "finance [Plaintiffs] construction of a residence and related improvement on the property" and to refinance the property³; the first mortgage loan was for $1,462, 500 ("first mortgage loan") and the second mortgage loan was for $195,000 ("second mortgage loan"). [DE 32-1, p. 4]; [DE 28, ¶ ¶ 17, 18]. In order to obtain these loans, Plaintiff submitted a loan application. [DE 28, ¶ ¶ 17, DE 32-2]. This application—commonly referred to as a Uniform Residential Loan Application ("URLA")—required Plaintiff to provide a variety of detailed information regarding his financial standing, such as net assets, income, and expenses. See [DE 32-2].

Plaintiffs Uniform Residential Mortgage Application, which Plaintiff swore contained true and correct information, ⁴reflected a monthly income of $35,416.00. [DE 28, ¶ 25]. However, Plaintiff claims that his income at the time was only $15,522.28 and that Defendant "inflated the true income figures to justify the loan and prepare the loan for future assignment or sale" and to induce Plaintiff to "incur a loan obligation that the Defendant was fully aware that Plaintiff would ultimately be unable to pay." [DE 28, ¶ 28]. Plaintiff also asserts that Defendant neglected to make certain disclosures required by the Truth In Lending Act ("TILA"), 15 U.S.C. § 1601, et seq, and that Plaintiff is thus entitled to rescind the transactions at issue pursuant to the statute. [DE 28, ¶¶6-16, 30-33, 39-56].

III. Standard of Review

For the purposes of a motion to dismiss, my review is "limited to the four corners of the complaint" and any documents referred to in the complaint which are cen- tral to Plaintiffs claims. St. George v. Pinellas Cty., 285 F.3d 1334, 1337 (11th Cir.2002). Thus, for the purposes of deciding Defendant's motion, only the contents of Plaintiffs Second Amended Complaint and certain central documents will be considered. Brooks v. Blue Cross & Blue Shield of Florida, 116 F.3d 1364, 1369 (11th Cir.1997) (noting that if a "plaintiff refers to certain documents in the complaint and those documents are central to the plaintiffs claim, then the Court may consider the documents part of the pleadings for purposes of Rule 12(b)(6) dismissal, and the defendant's attaching such documents to the motion to dismiss will not require conversion of the motion into a motion for summary judgment.")

In determining whether to grant a motion to dismiss, I must accept all the factual allegations in the complaint as true and evaluate all inferences derived from those facts in the light most favorable to the Plaintiff. Hill v. White, 321 F.3d 1334, 1335 (11th Cir.2003); Hoffend v. Villa, 261 F.3d 1148, 1150 (11th Cir.2001). "Federal Rule of Civil Procedure 8(a)(2) requires only '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.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1959, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957)). "Of course, 'a formulaic recitation of the elements of a cause of action will not do.'" Watts v. Florida Intern. University, 495 F.3d 1289, 1295 (11th Cir.2007) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). "While Rule 12(b)(6) does not permit dismissal of a well-pleaded complaint simply because it strikes a savvy judge that actual proof of those facts is improbable, the factual allegations must be enough to raise a right to relief above the speculative level." Watts, 495 F.3d at 1295 (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955) (internal quotations omitted). In other words, "[t]o 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, —U.S.—, 129 S.Ct.

1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). "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. It follows that "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.'" Id. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)).

The pleading requirements are different for certain matters, including matters where fraud is alleged, such as Plaintiffs second cause of action for aiding and abetting a fraud. Federal Rules of Civil Procedure 9(b) provides that in "alleging fraud... a party must state with particularity the circumstances constituting fraud." The Eleventh Circuit has held that in order to comply with the mandate of Rule 9(b), a Plaintiff must set forth "(1) precisely what statements were made in what documents or oral representations or what omissions were made, (2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) same, (3) the content of such statements and the manner in which they misled the plaintiff, and (4) what the defendants obtained as a consequence of the fraud." Ziemba v. Cascade Int'l, Inc., 256 F.3d 1194, 1202 (11th Cir.2001) (quoting Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1371 (11th Cir.1997)). Simply put, Plaintiffs alleging fraud must plead "the who, what, when, and where [of the fraud] before access to the discovery process is granted." Williams v. WMX Techs., Inc., 112 F.3d 175, 178 (5th Cir.1997) (emphasis in original). This rule requiring particularity serves an important purpose in fraud actions by "alerting defendants to the precise misconduct with which they are charged and protecting defendants against spurious charges of immoral and fraudulent behavior." United States ex rel. Atkins v. Mclnteer, 470 F.3d 1350, 1359 (11th Cir.2006) (quoting Durham v. Bus. Mgmt. Assoc., 847 F.2d 1505, 1511 (11th Cir. 1988)) (internal quotes omitted). The remedy for a failure to plead with sufficient particularity is dismissal with or without prejudice, depending on the circumstances. Id. at 1362 (affirming district court's dismissal of claim with prejudice for failing to plead fraud with sufficient particularity).

IV. Analysis

A. Count I—Fraud

Plaintiffs first cause of action asserts that Defendant perpetrated a fraud upon the Plaintiff. The crux of this claim is that "Defendant made misrepresentations in the [URLA] when it specifically knew that the representations as [they] pertain to the Plaintiffs income [were] false."⁵ [DE28, ¶ 33]. In order to state a cause of action for fraudulent misrepresentation under Florida law, ⁶ Plaintiff must adequately allege the following elements: (1) a false statement by Defendant concerning a material fact; (2) the Defendant's knowledge that the representation was false; (3) that the representation was made by Defendant with the intent to induce another to act on it; and (4) that Plaintiff suffered a consequent injury in reliance on the representation. Johnson v Davis, 480 So.2d 625, 627 (Fla.1985). A plaintiffs "[f]ailure to allege a specific element of fraud in a complaint is fatal when challenged by a motion to dismiss." Strack v. Fred Rawn Constr., Inc., 908 So.2d 563 (Fla. 4th DCA 2005) (affirming dismissal of fraud count with prejudice where plaintiff failed to allege all elements despite having been given multiple opportunities to do so).

Here, Plaintiffs fraud claim fails for a number of reasons. First, Plaintiff fails to adequately allege a false statement by Defendant concerning a material fact. As Defendant correctly points out, "a loan application is a request by the borrower for a loan; it does not contain any repre- sentations by the lender." [DE 32, p.8].

To the contrary, the statements contained in a URLA are the applicant's "own statement[s] regarding his income" and are certified by the applicant when he signs ...