Vassallo v. Bank of N.Y.

• Decision Date: 08 April 2016
• Docket Number: Civil Action No. 15-3227
• Parties: Re: Christopher Vassallo v. The Bank of New York et al.
• Court: U.S. District Court — District of New Jersey

Re: Christopher Vassallo v. The Bank of New York et al.

Civil Action No. 15-3227

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

April 8, 2016

CHAMBERS OF JOHN MICHAEL VAZQUEZ UNITED STATES DISTRICT JUDGE

VIA ECF AND REGULAR MAIL

LETTER ORDER AND OPINION

Dear Litigants:

The Court has reviewed the Motion to Dismiss for failure to state a claim upon which relief can be granted. For the reasons stated below, the motion is granted, however, Plaintiff Christopher Vassallo is granted leave to amend Count Eleven of the Complaint for "Fraud in the Concealment." The remainder of the counts are dismissed with prejudice.

On May 8, 2015, pro se Plaintiff Christopher Vassallo ("Plaintiff) filed a Complaint against Defendants The Bank of New York F/K/A The Bank of New York Mellon as Trustee for the Alternative Loan Trust 2006-17T1 ("BONY"), Bank of America, N.A. ("BANA"), and Mortgage Electronic Registration Systems, Inc. ("MERS") (collectively "Defendants"). D.E. 1. The Complaint asserts the following fourteen causes of action against Defendants: "Declaratory Relief (Count One), "Injunctive Relief (Count Two), "Quiet Title" (Count Three), "Negligence Per Se" (Count Four), "Accounting" (Count Five), "Breach of Covenant of Good Faith and Fair Dealing" (Count Six), "Breach of Fiduciary Duty" (Count Seven), "Wrongful Foreclosure" (Count Eight), "Violation of the Real Estate Settlement Procedures Act" (Count Nine), "Violation of the Home Ownership Equity Protection Act" (Count Ten), "Fraud in the Concealment" (Count Eleven), "RICO" (Count Twelve), "Conversion" (Count Thirteen), and "Breach of Contract" (Count Fourteen). Compl. ¶¶ 135-259. On June 12, 2015, Defendants moved to dismiss the Complaint pursuant to Rule 12(b)(6) for failing to state a claim upon which relief can be granted. D.E. 4. On July 1, 2015, Plaintiff filed a brief in opposition to Defendants' motion to dismiss. D.E. 5. On July 10, 2015, Defendants filed a reply brief in further support of their motion to dismiss. D.E. 8.

According to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court should dismiss a complaint when it fails "to state a claim upon which relief can be granted." In analyzing a motion to dismiss under Rule 12(b)(6) the court will "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). To survive dismissal, "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, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Determining whether a complaint is plausible is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. While not a "probability requirement," plausibility means "more than a sheer possibility that a defendant has acted unlawfully." Id. at 678. "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. A court, however, is "not compelled to accept unwarranted inferences, unsupported conclusions or legal conclusions disguised as factual allegations." Baraka v. McGreevey, 481 F.3d 187, 211 (3d Cir. 2007).

Fraud allegations are considered special matters, subjecting them to the requirements of Rule 9 of the Federal Rules of Civil Procedure. Pursuant to Rule 9(b), when "alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." The complaint must include factual details such as "the who, what, when, where and how of the events at issue." U.S. ex rel. Moore & Co., P.A. v. Majestic Blue Fisheries, LLC, 812 F.3d 294, 307 (3d Cir. 2016) (internal quotation marks omitted). Accordingly, "[t]o satisfy the particularity standard, the plaintiff must plead or allege the date, time and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation." Feingold v. Graff, 516 F. App'x 223, 226 (3d Cir. 2013) (internal quotation marks omitted).

If a plaintiff fails to adequately state a claim, the Court should permit an amendment to the complaint as long as doing so would not be futile. Schiano v. MBNA, No. 05-1771, 2013 WL 2452681, at *11 (D.N.J. Feb. 11, 2013). As explained by the Third Circuit,

"'Futility' means that the complaint, as amended, would fail to state a claim upon which relief could be granted. In assessing 'futility,' the District Court applies the same standard of legal sufficiency as applies under Rule 12(b)(6). Accordingly, if a claim is vulnerable to dismissal under Rule 12(b)(6), but the plaintiff moves to amend, leave to amend generally must be granted unless the amendment would not cure the deficiency."

[Hoist v. Oxman, 290 F. App'x 508, 510 (3d Cir. 2008) (quoting Shane v. Fauver, 213 F.3d 113, 115 (3d Cir.2000)).]

Because Plaintiff is proceeding pro se, the Court construes the pleadings liberally and holds him to a less stringent standard than those filed by attorneys. Haines v. Kerner, 404 U.S. 519, 520 (1972). However, the "Court need not . . . credit a pro se plaintiff's 'bald assertions' or 'legal conclusions.'" DAgostino v. CECOM RDEC, No. 10-4558, 2010 WL 3719623, at *1 (D.N.J. Sept. 10, 2010).

The facts of this matter derive from Plaintiff's Complaint, the exhibits annexed to the Complaint, and the exhibits annexed to Defendants' Motion to Dismiss. See Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) (holding that "a court may consider undisputedly authentic documents] that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the [attached] document[s]"). On March 6, 2006, Plaintiff executed a note (the "Note) in favor of non-party First Financial Equities, Inc. ("First Financial") in exchange for a loan in the amount of $560,000.00. Defendants' Mot. To Dismiss, Ex. A. The Note was secured by a mortgage on real property (the "Mortgage") located at 14 Hillside Drive, Fairfield, New Jersey 07004 (the "Property"). Defendants' Mot. To Dismiss, Ex. B. Plaintiff and Rita Vassallo were designated as mortgagors and Defendant MERS was designated as the mortgagee and nominee for First Financial as well as its successors and assigns. Defendants' Mot. to Dismiss, Ex. B. On April 5, 2006, the Mortgage was recorded with the Essex County Clerk. Defendants' Mot. to Dismiss, Ex. B. Years later, on June 1, 2011, the Mortgage was assigned from First Financial to Defendant BONY and subsequently recorded in Essex County on June 21, 2011. Defendants' Mot. to Dismiss, Ex. C. According to the Complaint, Defendant BANA purchased the Mortgage "at an unknown time and date." Compl. ¶ 35.¹

At an unspecified time period, Plaintiff "purchased a Securitization audit to see where his chain of title lay" and "to uncover the real parties in interest in his loan." Compl. ¶ 45. Plaintiff alleges that the audit revealed that on or about April 27, 2007, the Note was "bundled into a group of Notes and subsequently sold to investors as a derivative 'Mortgage Backed Security,' issued by B[O]NY, entitled ALTERNATIVE LOAN TRUST 2006-17T1." Compl. ¶ 46. Plaintiff concludes that "none of the Defendants own this loan, or NOTE, and cannot be and are not the Beneficiary under the MORTGAGE, or lawfully appointed Trustee under the MORTGAGE" and thus cannot lawfully foreclose on the Property. Compl. ¶ 46. Accordingly, Plaintiff alleges that "Defendants and the TRUST are not holders or holders in due course of the NOTE" and that "Defendants and the TRUST are not beneficiaries under the Mortgage." Compl. ¶ 58.

Plaintiff acknowledges that at some time in 2011 he fell behind on his Mortgage payments. Compl. ¶ 36. Plaintiff alleges that in 2012, BANA offered him a "trial modification to bring his account into good standing." Compl. ¶ 38. Plaintiff maintains that he "diligently cooperated with the trial modification payments" for the agreed upon eleven-month period, but BANA ultimately rejected Plaintiff's March 1, 2013 payment. Compl. ¶ 39. Plaintiff contends that as of April 16, 2015, BANA, "after blatantly misleading Plaintiff for more than a year, has stated its intention to foreclose on the subject property in dispute." Compl. ¶ 41. It appears, however, that at least as of the time of Plaintiff's reply brief. Defendants had not initiated a foreclosure action against Plaintiff. Plaintiff's Resp. to Mot. to Dismiss at 5; Compl. ¶ 43.

As an initial matter, in Plaintiff's Response to the Motion to Dismiss, he has indicated that he wishes to voluntarily withdraw seven causes of action originally pleaded in the Complaint. Plaintiff states that "in 'good faith,' [he] shall withdraw the following causes of action:

1. Negligence

2. HOEPA

3. TILA

4. Violation of RE[S]PA

5. Violation of R.I.C.O.

6. Accounting

7. Injunctive Relief." Plaintiff's Resp. to Mot. to Dismiss at 3.

Accordingly, due to Plaintiff's desire to abandon such claims, and the additional reasons stated herein, the above-referenced Counts are dismissed with prejudice.

Moreover, the Court find that Counts 4, 6, 7, and 11 -- negligence per se, breach of covenant of good faith and fair dealing, breach of fiduciary duty, and fraud in the concealment, respectively -- are all tort claims based solely on the contractual relationship created by the Mortgage and Note. The economic loss doctrine "prohibits plaintiffs from recovering in tort economic losses to which their entitlement only flows from a contract." Duquesne Light Co. v. Westinghouse Elec. Co., 66 F.3d 604, 618 (3d Cir. 19...