Wilson v. Beneficial Mortg. Co., CIVIL ACTION NO. 3:16-CV-00217

Decision Date18 January 2017
Docket NumberCIVIL ACTION NO. 3:16-CV-00217
PartiesCARLA WILSON, Plaintiff, v. BENEFICIAL MORTGAGE CO., HSBC, Defendant.
CourtU.S. District Court — Middle District of Pennsylvania

(MARIANI, J.)

(MEHALCHICK, M.J.)

REPORT AND RECOMMENDATION

Plaintiff Carla Wilson, proceeding pro se, initiated the above-captioned action in the Court of Common Pleas of Monroe County, Pennsylvania by the filing of a praecipe for writ of summons on January 14, 2016, followed by a complaint on January 15, 2016. (Doc. 1-2, at 3-22). In her complaint, Wilson seeks rescission of her loan and money damages against Defendant Beneficial Consumer Discount Co. d/b/a Beneficial Mortgage Co. of Pennsylvania ("Beneficial"), for alleged violations of the federal Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq., the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"), Pub. L. No. 111-203, § 1416(b), 124 Stat. 1376 (codified at 15 U.S.C. § 1640(e)), the Due Process Clause of the Fourteenth Amendment, the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 Pa. Cons. Stat. § 201-1 et seq., the Pennsylvania Fair Credit Extension Uniformity Act ("FCEUA"), 73 Pa. Cons. Stat. § 2270.1 et seq., as well as common law claims for breach of contract and breach of the implied covenant of good faith and fair dealing. (Doc. 1-2, at 5). After receiving service of the complaint on January 19, 2016, Beneficial removed the case to federal court on February 8, 2016 on the basis of federal question jurisdiction. (Doc. 1). Four days later, Wilson filed a motion to remand the action back to the Court of Common Pleas of Monroe County (Doc. 4), which the District Court denied on September 6, 2016 (Doc. 19). While Wilson's motion to remand was pending, Beneficial filed the instant motion to dismiss Wilson's complaint on March 16, 2016. (Doc. 11). For the reasons provided herein, it is recommended that Beneficial's motion to dismiss be granted in part.

I. BACKGROUND

This action concerns a July 18, 2007 mortgage refinancing executed between Wilson and Beneficial in relation to real property located at 2512 Forest Drive East in Pocono Lake, Pennsylvania. (Doc. 1-2, at 5; Doc. 12-2, at 21-31). The mortgage terms called for the $176,737.71 loan principal to be repaid over a thirty-year period. (Doc. 12-2, at 17, 22). Wilson states that her initial monthly payment was $1,748.88 at a contract interest rate of 11.49%, with the interest rate gradually dropping to 8.49% over the first ten years of the loan if Wilson made timely payments. (Doc. 12-2, at 17-18; Doc. 15, at 6-7). Furthermore, Wilson alleges that Beneficial excluded taxes and homeowners' insurance from the mortgage amortization schedule in order to make the repayment amounts appear more reasonable in light of Wilson's $46,500 salary. (Doc. 1-2, at 12).

A few years into the mortgage, Wilson apparently began to struggle to make her monthly payments. (Doc. 15, at 6-7). Beneficial then granted Wilson a series of temporary loan modifications in 2009, 2010, and 2012. (Doc. 1-2, at 86-88, 99-101, 116-18). Nonetheless, Wilson contends that these modifications came with large unexplained ancillary fees that actually increased her payments to slightly above what they would have been if she had received all the interest rate reductions contained in the initial mortgage amortization schedule. (Doc. 1-2, at 8-9). As a result, Wilson continued to seek additional modifications and/or raterestructuring. (Doc. 1-2, at 18, 102-15). However, Wilson has been unable to significantly reduce her monthly payments, in part because Beneficial discontinued the interest rate reductions that she was originally eligible to receive as one of the terms of Wilson's loan modifications. (Doc. 1-2, at 18, 102-15). Wilson contends that Beneficial committed numerous violations of federal and state laws since the execution of the mortgage and through the various modifications in an effort to force her to default on her loan obligations. (Doc. 1-2, at 14-16).

In its motion to dismiss Wilson's complaint, Beneficial contends that Wilson fails to state a claim with respect to each of the various causes of action that she raises. (Doc. 11; Doc. 13, at 9). Beneficial's motion has been fully briefed and is now ripe for adjudication. (Doc. 12; Doc. 13; Doc. 14; Doc. 15).

II. RULE 12(b)(6) MOTION TO DISMISS STANDARD

Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a defendant to move to dismiss for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting all well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, a court finds the plaintiff's claims lack facial plausibility." Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)). Although a court must accept the fact allegations in a complaint as true, it is not compelled to accept "unsupported conclusions and unwarranted inferences, or a legal conclusion couched as a factual allegation." Morrow v. Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (quoting Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007)). Additionally, a court need not assume that a plaintiff can prove facts that the plaintiff has not alleged. Associated Gen. Contractors of Cal. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983).

In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court of the United States held that, when considering a motion to dismiss, a court should "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Iqbal, 556 U.S. at 679. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. In deciding a Rule 12(b)(6) motion, the Court may consider the facts alleged on the face of the complaint, as well as "documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).

Additionally, this Court is guided by the Supreme Court's instruction that a document filed pro se is "to be liberally construed." Estelle v. Gamble, 429 U.S. 97, 106 (1976). A pro se complaint, "however inartfully pleaded," must be held to "less stringent standards than formal pleadings drafted by lawyers" and can only be dismissed for failure to state a claim if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Haines v. Kerner, 404 U.S. 519, 520-21 (1972). In addition to the facts pled in Wilson's complaint, this Court may "also consider matters of public record, orders, exhibits attached to the complaint and items appearing in the record of the case." Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384-85 n.2 (3d Cir. 1994).

III. DISCUSSION
A. TILA

The gravamen of Wilson's complaint is that Beneficial failed to provide her with certain required disclosures with respect to her mortgage and loan modifications, in violation of TILA.(Doc. 1-2, at 5-22). "Congress enacted TILA in 1968 to promote the 'informed use of credit.'" Sherzer v. Homestar Mortgage Servs., 707 F.3d 255, 255 (3d Cir. 2013) (quoting 15 U.S.C. § 1601(a)). "To achieve this goal, TILA sought 'to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.'" Sherzer, 707 F.3d at 255-56 (quoting 15 U.S.C. § 1601(a)). "[C]reditors who make loans secured by a borrower's principal dwelling are required to provide all borrowers with 'material disclosures,' including 'the annual percentage rate, the finance charge, the amount financed, the total payments, [and] the payment schedule.'" In re Cmty. Bank of N. Virginia, 418 F.3d 277, 304 (3d Cir. 2005) (alteration in original) (quoting 12 C.F.R. § 226.23). A debtor may sue a creditor for damages for violations of TILA, including the failure to make required material disclosures. 15 U.S.C. § 1640(a). Furthermore, "when a loan made in a consumer credit transaction is secured by the borrower's principal dwelling, the borrower may rescind the loan agreement if the lender fails to deliver certain forms or to disclose important terms accurately." Beach v. Ocwen Fed. Bank, 523 U.S. 410, 411 (1998) (citing 15 U.S.C. § 1635). Here, Wilson seeks both money damages and recession of her mortgage pursuant to TILA. (Doc. 1-2, at 21).

Beneficial contends that Wilson's TILA claims are barred by the statute of limitations or otherwise fail to state a claim. (Doc. 13, at 14-15). As noted by Beneficial, a statute of limitations defense is appropriately raised in a motion to dismiss where a claim's untimeliness is apparent on the face of the complaint. (Doc. 13, at 14-15 n.2); see also Robinson v. Johnson, 313 F.3d 128, 135 (3d Cir. 2002). Because TILA provides different limitations periods for damages and rescission remedies, the Court will consider each remedy separately.

1. Damages

Beneficial asserts that to the extent Wilson seeks monetary damages under TILA for the failure to provide appropriate disclosures, her claim is barred by the statute of limitations. (Doc. 13, at 14). Most claims for damages under TILA are subject to a one-year limitations period. See 15 U.S.C. § 1640(e) ("Except as provided in the subsequent sentence, any action under this section may be brought in any United States district court . . . within one year from the date of the occurrence of the violation . . . ."). A limited exception provides a three-year statute of limitations for...

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