PNC Bank, N.A. v. Van Hoornaar

• Decision Date: 05 September 2014
• Docket Number: Case No. 13–C–1020.
• Citation: 44 F.Supp.3d 846
• Parties: PNC BANK, N.A., Plaintiff, v. Andre VAN HOORNAAR, and Astrid Groenveld, and National City Bank, Defendants. Andre Van Hoornaar, Counterclaimant, v. PNC Bank, N.A., successor by merger to National City Bank, and successor by merger to National City Mortgage, a division of National City Bank of Indiana, Counterclaim Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

44 F.Supp.3d 846

PNC BANK, N.A., Plaintiff
v.
Andre VAN HOORNAAR, and Astrid Groenveld, and National City Bank, Defendants.

Andre Van Hoornaar, Counterclaimant
v.
PNC Bank, N.A., successor by merger to National City Bank, and successor by merger to National City Mortgage, a division of National City Bank of Indiana, Counterclaim Defendant.

Case No. 13–C–1020.

United States District Court, E.D. Wisconsin.

Signed Sept. 5, 2014.

44 F.Supp.3d 849

Timothy M. Brovold, Gray & Associates LLP, New Berlin, WI, James J. Carrig, Niebler Pyzyk Roth & Carrig LLP, Menomonee Falls, WI, for Plaintiff.

Gary W. Thompson, Thompson Law Offices S.C., Milwaukee, WI, for Defendants.

DECISION AND ORDER

RUDOLPH T. RANDA, District Judge.

Defendants Andre van Hoornaar (“van Hoornaar”) and his wife, Astrid Groenveld, (collectively the “Defendants”) obtained a mortgage from Plaintiff PNC Bank, N.A's (“PNC”) predecessor on property located at 131 25th Avenue, Kenosha, Wisconsin (the “Property”). PNC filed a foreclosure action in state circuit court. (ECF No. 10–1) The Defendants removed the action to this District invoking diversity jurisdiction pursuant to 28 U.S.C. § 1331.¹ Van Hoornaar filed Counterclaims against PNC, which are styled as class action claims: breach of contract and declaratory judgment (Count I & II); violation of the Wisconsin recording statute (Count III) and trespass (Count IV).

This action is before the Court on PNC's motions to dismiss the Counterclaims and to strike, and the Defendants' motions to dismiss and for leave to file PNC's settlement offer under seal. (ECF Nos. 16, 20, 25, 27.)

MOTION TO DISMISS COUNTERCLAIMS

Pursuant to Fed.R.Civ.P. 12(b)(6), PNC asserts that van Hoornaar's Counterclaims should be dismissed because they fail to state a cause of action.

Standard of Review

For a complaint to withstand a Rule 12(b)(6) motion, a claimant is required to provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2) The pleading must include more than mere legal conclusions or a recitation of the cause of action elements, but does not require detailed factual allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The pleading must meet a plausibility threshold; mere possibility is not enough. Id. at 570, 127 S.Ct. 1955. Plausibility means there are enough facts in the complaint for a reviewing court to draw a reasonable inference that the pleader is entitled to relief. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). However, the Court need not accept as true its legal conclusions; “[t]hreadbare recitals of a cause of action's elements, supported by mere conclusory statements,” do not suffice. See id. at 663, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955 ).

Even after Twombly, courts must still approach motions under Rule 12(b)(6) by “constru[ing] the complaint in the light most favorable to the plaintiff, accepting as true all well-pleaded facts alleged, and drawing all possible inferences in her favor.”

44 F.Supp.3d 850

Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir.2008). This threshold requires a court to utilize its judicial experience and common sense within the context of the facts to determine whether the pleading meets the plausibility standard. Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.

A motion under Rule 12(b)(6) can be based only on the complaint itself, documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice. See Geinosky v. City of Chicago, 675 F.3d 743, 745 n. 1 (7th Cir.2012) (citing Fed.R.Civ.P. 10(c) (written instrument that is exhibit to pleading is part of pleading for all purposes); Papasan v. Allain, 478 U.S. 265, 268 n. 1, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) (judicial notice of public records); 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir.2002) (documents referred to in complaint and central to claim)).

When a defendant's Rule 12(b)(6) motion presents matters outside the pleadings, the court may either exclude those matters or convert the motion to one for summary judgment under Rule 56. Fed.R.Civ.P. 12(d). The Court has excluded the FedEx receipt attached to van Hoornaar's response brief. However, the Court may consider new facts asserted in a plaintiff's brief. See Geinosky, 675 F.3d at 745 n. 1.

Factual Background²

In 2006, van Hoornaar entered into a loan for the Property with PNC's predecessor. The loan was “owned or guaranteed by the Federal National Mortgage Association,” commonly known as Fannie Mae. (Second Am. Countercl. (“Countercl.”), ¶¶ 28, 29.) (ECF No. 15.) In February 2013, when he was living in Asia, van Hoornaar “stopped making payment to PNC on his first mortgage” and “chose not to apply for HAFA³ benefits” after this default. (Id. at ¶ 20.) Van Hoornaar states that had PNC offered, he would have complied with a deed-in-lieu of foreclosure, under 24 C.F.R. § 203.357. (Id. ) Instead, on June 26, 2013, PNC filed a foreclosure action against the Defendants. (Id. )

Van Hoornaar fully repaid a second mortgage with PNC, and on August 21, 2013, he “caused to be personally delivered to [PNC] ... a request to Terminate and Satisfy/Discharge the 2nd mortgage on the property.” (Id. at ¶ 54.) On September 10, PNC recorded a release and satisfaction of the second mortgage. (Id. at ¶ 55.)

In mid-September, PNC posted a notice on the property stating that it appeared to be abandoned and that PNC's agents would enter it to protect it. On September 27, van Hoornaar's attorney called PNC and informed it that the property was not abandoned and was being maintained. Van Hoornaar's attorney also sent a confirming email. On September 28, PNC's agents entered the property without consent from van Hoornaar or his wife and damaged/changed the lock on the back door, allowing PNC to enter the property at will. PNC also winterized the house without consent, including draining the pipes making the property no longer habitable.

Breach of Contract and Declaratory Judgment Claims

PNC asserts that van Hoornaar fails to state claims for breach of contract

44 F.Supp.3d 851

and declaratory judgment because the National Housing Act and the Department of Housing and Urban Development (“HUD”) regulations, upon which they rely (1) are not applicable to van Hoornaar's loan, and (2) do not create a private cause of action, citing Herron v. Fannie Mae, 857 F.Supp.2d 87, 93 (D.D.C.2012). Van Hoornaar counters that counts I and II are Fifth Amendment equal protection claims intertwined with his contract claims, and that Herron is flawed because it assumes FHFA's takeover of Fannie Mae was legal. Van Hoornaar urges the Court to stay its decision until issuance of a decision on the United States' motion to dismiss in Washington Federal et al. v. United States, No. 13–385C (Fed.Ct.Cl.). Van Hoornaar also requests leave to amend his Counterclaims to correct any deficiencies.

Van Hoornaar's Counterclaims do not mention any Fifth Amendment equal protection claim or name any federal official. His response to PNC's motion to dismiss refers to Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), which makes available a private action for monetary relief against federal officials for the violation of constitutional rights. However, a complaint may not be amended by a brief in opposition to a motion to dismiss. See Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1107 (7th Cir.1984).

“[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936). How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance. Id. at 254–55, 57 S.Ct. 163. The moving party must make a “clear case of hardship or inequity in being required to go forward” if there is a fair possibility the non-moving party would be harmed by delay. Id. at 255, 57 S.Ct. 163 ; see Clinton v. Jones, 520 U.S. 681, 708, 117 S.Ct. 1636, 137 L.Ed.2d 945 (1997) (movant petitioning for a stay bears the burden of establishing its need). Van Hoornaar's request for a stay is based on his prediction that a non-binding decision on a motion to dismiss will be favorable to his position. Van Hoornaar has not established that these proceedings should be stayed.

Counts I and II of van Hoornaar's Counterclaims are based the Housing and Economic Recovery Act of 2008 (“HERA”) which created FHFA, the federal regulatory agency currently charged with general supervisory and regulatory authority over Fannie Mae and Federal Home Loan Mortgage Corporation (“Freddie Mac”). 12 U.S.C. § 4511(b). (Countercl. ¶¶ 32, 33.) Although van Hoornaar's loan was not “guaranteed by HUD,” he asserts that “he is...