Roberts v. Am. Bank & Trust Co.

• Citation: 835 F.Supp.2d 183
• Decision Date: 21 December 2011
• Docket Number: Civil Action No. 11–2054.
• Court: U.S. District Court — Eastern District of Louisiana
• Parties: Vivian A. ROBERTS v. AMERICAN BANK & TRUST CO., INC., et al.

835 F.Supp.2d 183

Vivian A. ROBERTS

v.AMERICAN BANK & TRUST CO., INC., et al.

Civil Action No. 11–2054.

United States District Court,

E.D. Louisiana.

Dec. 21, 2011.

Donald J. Juneau, Attorney at Law, Hammond, LA, for Vivian A. Roberts.

Robin Bryan Cheatham, Robin Bryan Cheatham, Adams & Reese, LLP, Ellis B. Murov, Deutsch, Kerrigan & Stiles, LLP, New Orleans, LA, for American Bank & Trust Co., Inc., et al.

ORDER & REASONS

ELDON E. FALLON, District Judge.

Before the Court are three motions: a Motion to Dismiss Claims against American Bank & Trust Co. and Marian Kinchen Pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(b)(1) (Rec. Doc. No. 7) filed by Defendants American Bank & Trust Co. and Marian Kinchen; a Motion to Dismiss Pursuant to Rules 12(b)(6) and 12(b)(1) (Rec. Doc. No. 17) filed by Defendants Penny Daigrepont, Claire Mayer, Shapiro & Daigrepont, and Eva Simkovitz; and a Motion for a Preliminary and Permanent Injunction (Rec. Doc. No. 10) filed by Plaintiff. The Court, having reviewed the submitted memoranda and the applicable law, now issues this Order & Reasons.

I. BACKGROUND

This case arises out of an executory process proceeding instituted against Plaintiff by Defendant American Bank & Trust Co. (“American Bank”). Plaintiff avers that on April 9, 2009, she executed a note in favor of Defendant American Bank in the amount of $165,750. The note was secured by a mortgage on the property located at 40065 Emerald Drive, Unit A, Ponchatoula, Louisiana. Plaintiff became delinquent on that note, and Defendant American Bank instituted an executory process against her on June 7, 2011, in the Judicial District Court for the Parish of Tangipahoa, Louisiana. On June 24, 2011, Plaintiff removed the Executory Process Petition to this court and filed an answer, asserting counterclaims against Defendant American Bank. In addition, Plaintiff asserted claims against the law firm of Shapiro & Daigrepont, LLC, as well as certain individuals with the law firm (collectively, “the Shapiro & Daigrepont Defendants”), and Ms. Marian Kinchen, an employee of Defendant American Bank (together with Defendant American Bank, “the American Bank Defendants”). On August 17, 2011, this Court granted American Bank's Motion to Remand, citing the lack of federal question jurisdiction over the removed foreclosure action, and further noting that the state court would address the need to strike Robert's Answer and Counterclaim pursuant to Article 2642 of the Louisiana Code of Civil Procedure.

On August 19, 2011, Plaintiff filed the instant suit in this Court, reiterating the same claims made in her counterclaims in the remanded action. Namely, Plaintiff seeks (1) to recover damages under the Truth–in–Lending Act for Defendant American Bank's alleged failure to make substantial disclosures to Plaintiff and failing to tender her two copies of a notice of a right to rescind on April 2, 2009; (2) to recover damages under the Fair Debt Collection Practices Act from the American Bank Defendants and the Shapiro & Daigrepont Defendants for their alleged harassing letters and phone calls; (3) to recover damages from the American Bank Defendants and the Shapiro & Daigrepont Defendants for their alleged violation of the automatic stay granted to Plaintiff upon her filing of a Chapter XIII bankruptcy petition; (4) to recover damages under the Louisiana Unfair Trade Practices and Consumer Protection Law from the American Bank Defendants and the Shapiro & Daigrepont Defendants; and (5) to have the note executed on April 9, 2009, declared null, void, and unenforceable. Furthermore, Plaintiff seeks various forms of equitable relief from this Court, specifically: (a) a preliminary and permanent injunction against Defendant American Bank, restraining it from taking further action in the executory proceeding currently pending in state court; (b) a mandatory injunction against Defendant United States Agriculture, requiring it to provide Plaintiff with special loan servicing under 42 U.S.C. § 1472(h) and 7 C.F.R. §§ 1980.373 and 1980.374; (c) the appointment of a receiver to supervise and manage the activities and procedures of Defendant Shapiro & Daigrepont its to ensure that it complies with applicable federal laws; (d) the creation of a constructive trust for all monies received by Defendant American Bank from Plaintiff in connection with the April 9, 2009, note; and (e) an accounting by Defendant American Bank for all monies received from Plaintiff in connection with the April 9, 2009, note. Finally, Plaintiff asserts that the executory process procedure that was used by Defendant American Bank, codified in Articles 1633 through 1644 of the Louisiana Code of Civil Procedure, violates Plaintiff's substantive and procedural due process rights as guaranteed by § 1 of the Fourteenth Amendment and § 1 of the Civil Rights Act of 1871.

II. PENDING MOTIONSA. American Bank and Marian Kinchen's Motion to Dismiss (Rec. Doc. No. 7)

The American Bank Defendants contend that Plaintiff fails to state causes of action upon which relief can be granted under any of the statutes allegedly violated. Moreover, Defendants argue that this Court lacks jurisdiction over her Plaintiff's claims related to the ongoing state court proceeding and the claims arising under the Bankruptcy Code. The Court will describe the arguments in turn and then address the applicable law and the Court's ruling.

1. Truth–in–Lending Act

The American Bank Defendants argue that Plaintiff's claim under 15 U.S.C. § 1635 of the Truth–in–Lending Act fails as a matter of law for two reasons. First, they note that any action for damages under such provision must be brought within one year of the violation, pursuant to 15 U.S.C. § 1640(e). In addition, Defendants observe that Plaintiff does not allege fraudulent concealment or other actions by American Bank that would have prevented Plaintiff from discovering her claim. Defendants argue that because the alleged violation of the statute occurred on April 9, 2009, and this suit was filed in August 2011, the claim is proscribed.

Second, Defendants contend that the transaction between Plaintiff and Defendant American Bank is exempt from the right to rescind protected by the Truth–in–Lending Act. Defendants claim that, under the statute, a mortgagor has no duty to disclose the obligor's right to rescind in a purchase-money residential mortgage transaction. Citing Ortiz v. Accredited Home Lenders, Inc., 639 F.Supp.2d 1159 (S.D.Cal.2009), Defendants argue that they could not have violated a duty to disclose Plaintiff's right to rescind when no such duty existed. As a result, according to Defendants, Plaintiff's claim under the Truth–in–Lending Act should be dismissed.

Plaintiff made two responses to this argument. Plaintiff argues, first, that the date of Defendants' violation was July 7, 2011. Plaintiff avers that she mailed her notice of rescission to Defendant American Bank on June 20, 2011. Therefore, she argues, Defendant American Bank violated the statute when it failed to take steps to cancel the security interest it held on her property and return Plaintiff's money within twenty days, or on July 11, 2011. Because this suit was filed the following month, Plaintiff concludes that it is within the statute of limitations and should not be dismissed on those grounds.

Second, Plaintiff claims that the details of her mortgage transaction render it an exception to the residential mortgage transaction exception to the right to rescission. Under the Truth–in–Lending Act, there is a right to rescission in the context of a residential mortgage if the obligor had “previously purchased and acquired some interest to the dwelling.” 12 C.F.R. § 226.2(a)(24). Plaintiff alleges that on February 21, 2009, she wrote a $1000.00 check as a down payment to the realty firm with whom she dealt in her purchase of the residence at issue. This check, she claims, created an enforceable contract between Plaintiff and Defendant American Bank. Citing Estate of Martinek, 140 Ill.App.3d 621, 94 Ill.Dec. 939, 488 N.E.2d 1332 (1986), Plaintiff contends that this down payment made her an equitable owner of the property. Therefore, she argues, when the loan was closed on April 9, 2009, her purchase was of a home in which she had previously acquired an interest. As a result, Plaintiff claims, her mortgage transaction would be subject to the Truth–in–Lending Act's right to rescission, and this claim should not be dismissed.

2. Fair Debt Collection Practices Act

The American Bank Defendants argue that Plaintiff's claim under the FDCPA fails as a matter of law also fails for two reasons. First, Defendants claim that the statute exempts both banks and their employees. Defendants assert that the FDCPA specifically excludes from its ambit creditors' employees collecting in the name of the creditor. See15 U.S.C. § 1692a(6)(A). Furthermore, citing Thomasson v. Bank One, Louisiana, N.A., 137 F.Supp.2d 721 (E.D.La.2001), American Bank claims that it, too, would be outside the reach of the FDCPA because it does not fit the definition of “debt collector” as the statute defines the term.

Second, the American Bank Defendants argue that Plaintiff's claim under the FDCPA is time-barred. Noting the one-year statute of limitations for violations of the Act, 15 U.S.C. § 1692k(d), Defendants argue that even if Plaintiff could bring a claim against them under the FDCPA, the violations are not alleged to have occurred within the past year, and therefore the suit is proscribed.

In response to the first argument, Plaintiff disputes the exemptions and contends that Defendants did not cite sufficient authority in support of their argument. In response to Defendant's argument that the claim was time-barred, Plaintiff asserts that the violation of the FDCPA occurred when Defendants made harassing phone calls, beginning February 3, 2011. Therefore, Plaintiff avers that the suit was filed within a year...