Miller v. HSBC Bank United States, N.A.
| Decision Date | 10 February 2015 |
| Docket Number | 13 Civ. 7500 |
| Parties | IVY MILLER, Plaintiff, v. HSBC BANK USA, N.A., Defendant. |
| Court | U.S. District Court — Southern District of New York |
APPEARANCES:
Attorneys for Plaintiff
LAW OFFICE OF MICHAEL E. HERSKOWITZ, ESQ.
New York, NY 11234
By: Michael E. Herskowitz, Esq.
Attorneys for Defendant
PHILLIPS LYTLE LLP
The New York Times Building
620 Eighth Avenue, 23rd Floor
New York, NY 10018
By: Sean C. McPhee, Esq.
Joseph B. Schmidt, Esq.
Sweet, D.J.
Defendant HSBC Bank USA, N.A. ("HSBC") has moved pursuant to Federal Rules of Civil Procedure 8(a), 9 (b), and 12(b)(6) to dismiss the amended complaint ("AC") of plaintiff Ivy Miller ("Miller" or "Plaintiff"). Based upon the conclusions set forth below, the motion of HSBC is granted, and the AC is dismissed with prejudice.
This action was filed on October 24, 2013, on behalf of 40 plaintiffs and against three different defendants - HSBC, JPMorgan Chase Bank N.A. ("Chase") and Caliber Home Loans Inc. ("Caliber"). On March 26, 2014, all plaintiffs voluntarily dismissed their complaint as against Chase. Two weeks later, all plaintiffs, except for the first named plaintiff, Miller, voluntarily dismissed their complaint against Caliber. The following day, all plaintiffs, again with the exception of Miller, voluntarily dismissed their claims against HSBC.
The claims asserted on behalf of 39 of the 40 original plaintiffs in this action were voluntarily dismissed in light of the dismissals of identical claims brought by Miller's attorneyson behalf of countless plaintiffs in no fewer than 12 other actions recently filed in the United States District Court for the Eastern District of New York.1
On May 9, 2014, Miller amended her complaint to assert claims solely by her and solely against HSBC. That filing was rejected by the Clerk of the Court as deficient on May 12, 2014. Later that day, Miller re-filed the AC. That filing, too, was rejected by the Clerk of the Court. The text of that rejection states "leave to file expired May 9, 2014." (See generally Dkt. Nos. 17-19.)
The AC centers around HSBC's allegedly "fraudulent loan modification program" and is based upon the claim of entitlement to modification. (See AC ¶¶ 12-24, 37.) The AC also alleges that HSBC is liable for violations of the Home Affordable Modification Program ("HAMP"). (See AC ¶¶ 6, 21, 34, 35.)
The AC also alleges breach of contract, of the implied covenant of fair dealing, promissory estoppel, fraudulent concealment, violation of New York General Business Law § 349, unjust enrichment and violation of Real Estate Settlement Practices Act ("RESPA"), 12 U.S.C. § 2605(e). (AC ¶¶ 45-100.)
The motion of HSBC to dismiss the AC was heard and marked fully submitted on October 29, 2014.
On a motion to dismiss pursuant to Rule 12(b) (6), all factual allegations in the complaint are accepted as true, and all inferences are drawn in favor of the pleader. Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir. 1993). However, 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, 663 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
A claim is facially plausible when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 663 (quoting Twombly,550 U.S. at 556). In other words, the factual allegations must "possess enough heft to show that the pleader is entitled to relief." Twombly, 550 U.S. at 557 (internal quotation marks omitted).
On May 15, 2014, Miller re-filed the AC and attached to it a request for an extension of her deadline for leave to file her the AC (the "Request"). (Dkt. No. 19.) As shown in the Request, HSBC agreed that it would not oppose Miller's request for an extension of her deadline to file the AC on the condition that she comply with Federal Rule of Civil Procedure 6 (b)(1)(B). (Dkt. No. 19-1.) Miller has not complied with Rule 6, has made no motion, has offered no good cause, and has suggested no excusable neglect for failing to properly and timely file the AC. Accordingly, Miller's AC can be dismissed for this reason alone.
Under New York law, a borrower has no entitlement to a permanent mortgage loan modification, and a lender is not liable for breach of contract by failing to offer one. See JP MorganChase Bank, N.A. v. Ilardo, 940 N.Y.S.2d 829, 841 (N.Y. Sup. Ct. 2012). In Ilardo, a borrower who had participated in a lender's trial modification plan later applied for, and was denied, a permanent loan modification. When the borrower defaulted under his loan, the lender commenced a foreclosure proceeding. In opposition, the borrower moved for summary judgment seeking a judicially imposed permanent loan modification. Id. at 832. The Court denied the motion because the borrower could not establish that the lender breached an enforceable obligation imposed under the parties' agreement by failing to offer the borrower a permanent loan modification. Id. at 841. Notably, the Court held "there is no federal entitlement to a permanent loan modification [and] the plaintiff did not breach the [parties' contract] by failing to offer a permanent modification of the loan." Id.; see also In re Morales, No. 13-36516, 2014 WL 930199, at *5-6 (Bankr. S.D.N.Y. Mar. 10, 2014) (citing Ilardo, 940 N.Y.S.2d at 840); Fournier v. Bank of Am. Corp., No. 13-CV-702, 2014 WL 421295, at *7 (N.D.N.Y. Feb. 4, 2014) () (citing Ilardo, 940 N.Y.S.2d at 841).
Similarly, in Wells Fargo Bank, N.A. v. Meyers, 108 A.D.3d 9 (2d Dep't 2013), the Appellate Division reversed the trial court's order imposing a loan modification on the lender. In doing so, the Appellate Division held that the trial court could not rewrite the mortgage because it would violate the Contract Clause of the United States Constitution, stating:
Indeed, the Supreme Court's interpretation of CPLR 3408(f) as authorizing it to, in effect, rewrite the mortgage and loan agreement would violate the Contract Clause of the United States Constitution . . . [and] the remedy employed by the Supreme Court here, in binding the parties to terms never agreed upon by either side, is without any source for its authority, and goes well beyond what would be justified by the State to safeguard the vital interests of its people.
Meyers, 108 A.D.3d at 22. (internal quotation marks and citations omitted).
The same result reached by the Ilardo Court applies here. HSBC had no obligation to permanently modify Miller's mortgage loan simply because she may have been offered a temporary loan modification. Further, as in Meyers, imposing a permanent loan modification on HSBC would amount to rewriting the parties' agreement. Because Miller is not entitled to a permanent loan modification as a matter of law, the AC is dismissed.
Plaintiff ignores Ilardo in her opposition and thus concedes this dispositive issue.
To state a claim for breach of contract, the plaintiff must allege: "(1) the existence of a contract, (2) performance by the party seeking recovery, (3) non-performance by the other party, and (4) damages attributable to the breach." Kramer v. N.Y. City Bd. of Educ., 715 F. Supp. 2d 335, 356 (E.D.N.Y. 2010) (citations omitted). In order to satisfy the first element, "a plaintiff must plead the provisions of the contract upon which the claim is based." James v. Countrywide Fin. Corp., 849 F. Supp. 2d 296, 322 (E.D.N.Y. 2012) (citation omitted); see also Fillmore E. BS Fin. Subsidiary LLC v. Capmark Bank, No. 11 Civ. 4491, 2013 WL 1294519, at *13 (S.D.N.Y. Mar. 30, 2013), aff'd, 2014 WL 67665 (2d Cir. Jan. 9, 2014) .
Further, under New York law, "a modification of a mortgage term . . . is governed by the Statute of Frauds" and "must be in writing to be enforceable." Pappas v. Resolution Trust Corp., 255 A.D.2d 887, 889 (4th Dep't 1998) ; see also QneWest Bank, FSB v. Davies, No. 16638-11, 2013 WL 846573, at *5 (N.Y. Sup. Ct. Feb. 22, 2013) )).
Miller's breach of contract claim is based on the theory that HSBC breached the terms of an alleged "trial modification" agreement when it failed to provide her with a permanent loan modification. (See AC p. 1 (); see also AC OT 47-48, 52.)
However, New York courts have routinely held that there "is no requirement that a foreclosing [mortgagee] modifyits mortgage loan prior to or after a default in payment." US Bank N.A. v. Orellana, 40 Misc. 3d 1204(A), 975 N.Y.S.2d 370, at *3 (N.Y. Sup. Ct. 2013); Graf v. Hope Bldg. Corp., 254 N.Y. 1, 4 (1930) (...
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