Wilson v. Parisi
| Decision Date | 26 February 2008 |
| Docket Number | No. 3:CV-04-1737.,3:CV-04-1737. |
| Citation | 549 F.Supp.2d 637 |
| Parties | Almus WILSON, Marilyn Wilson, Charmaine Cooper, Marco Yagual, Maria Yagual, Natalie Wilson, and Rayon McLean, Plaintiffs v. Steve PARISI, et al., Defendants. |
| Court | U.S. District Court — Middle District of Pennsylvania |
John P. O'Boyle, Scranton, PA, for Plaintiffs.
Marshall E. Anders, Anders & Masington, L.L.C., Jeffrey G. Velander, The Velander Law Office, David Walter Skutnik, Stroudsburg, PA, David A. Martino, Zito Martino & Karasek LLP, Brodheadsville, PA, Andrew J. Soven, Elizabeth C. F. Abrams, Louis W. Schack, Reed Smith LLP, John J. Hatzell, Jr., Law Offices of Lawrence P; Engrissel, Paul D. Weiner, Buchanan Ingersoll PC, Philadelphia, PA, Harold J. Engel, Reed Smith LLP, Washington, DC, Martin L. Legg, Paul Michienzie, Richard E. Bennett, Michienzie & Sawin LLC, Boston, MA, Stephen Moniak, Buchanan Ingersoll & Rooney PC, Harrisburg, PA, Sal Cognetti, Jr., Foley, Cognetti & Comerford, Scrafiton, PA, for Defendants.
This is one of several actions brought by purchasers of property in the Pocono Mountain region of Pennsylvania. The plaintiffs in these lawsuits claim they were the victims of a predatory lending scheme aimed at low income, unsophisticated home buyers lured into Pennsylvania by misleading advertisements. The plaintiffs assert claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO" or "Racketeering Act"), 18 U.S.C. §§ 1961-1968, and violations, of the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 P.S. §§ 201-1 to -9.3. These actions are brought against three categories of defendants: (1) the developers who sold the properties and arranged for financing;1 (2) the parties who appraised the properties; and (3) the lending institutions that provided the financing.2
In this action, all three (3) categories of defendants move for summary judgment against all seven (7) plaintiffs. Defendants' motions will be granted as to all Plaintiffs with the exception of Almus and Marilyn Wilson. As to the Wilsons' claims, the Lender Defendants' motions will be granted, but the Developer and Appraiser Defendants' motions will be granted only in part. Finally, the Lender Defendant's motion for summary judgment on its counterclaim against Plaintiff Natalie Wilson will be granted.
On August 6, 2004, seven (7) individuals, claiming to be victims of an alleged predatory lending scheme, filed this action against twenty-seven (27) defendants. (Dkt. Entry 1.) The Plaintiffs, Almus and Marilyn Wilson, Charmaine Cooper, Marco and Maria Yagual, and Rayon McLean and Natalie Wilson, purchased four (4) different properties in the Pocono Mountain Region of Pennsylvania. The three groups of Defendants in this case are as follows: (1) the PK Defendants—the developers who sold the properties and arranged for their financing;3 (2) Lisa Marie's Appraisal Service, Inc. and Lisa Marie Gibson (sometimes referred to collectively as "Lisa Gibson"), and Jenny Centrella—the parties who appraised three of the four properties at issue in this case; and (3) Bankers First Mortgage Inc. and Bankers 1st Mortgage Co., ("Bankers First"), New Centuiy Mortgage Corporation ("New Century"), Ocwen Federal Bank ("Ocwen"), Firstar Bank, N.A. ("Firstar"), Keystone Financial Mortgage ("Keystone"), Bank of America Mortgage ("Bank of America"), Irwin Mortgage Corporation d/b/a IFC Mortgage Corp. and Irwin Mortgage Corporation (collectively known as the "IMC Defendants"), IndyMac Bank ("IndyMac"), Bank One, N.A. ("Bank One"), and West Coast Realty Services, Inc. ("West Coast")—the lending institutions. In response to Plaintiffs' complaint, the majority of Defendants filed Motions to Dismiss.4
On February 7, 2006, this Court granted in part and denied in part Defendants' Motions to Dismiss. (Dkt. Entry 104.) Specifically, this Court declined to dismiss the first three counts of the Complaint, which asserted RICO claims. Lisa Gibson's Motion to Dismiss was denied for failure to file a supporting memorandum of law. As to the claims under the UTPCPL (Counts Five, Six, Seven and Twelve), the Court denied the PK Defendants' Motion to Dismiss,5 but granted the Lender Defendants' Motion to Dismiss Counts Five and Six and dismissed Plaintiffs' claims under the UTPCPL against the Lender Defendants without prejudice. The Court granted Defendant Bank One's Motion to Dismiss under the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. §§ 1639, et seq.6 Plaintiffs' claims under the Real Estate Settlement and Procedures Act ("RESPA"), 12 U.S.C. §§ 2601, et seq. (Counts Nine and Ten), were dismissed without prejudice, affording Plaintiffs leave to amend.7 Finally, the Court dismissed with prejudice Plaintiffs' claim of negligent misrepresentations against all Defendants.8
On June 15 and 16, 2006, Bank One and Indymac filed Motions for Judgment on the Pleadings. (Dkt. Entries 147, 148.) The Court granted both Motions and dismissed Bank One and IndyMac. (Dkt. Entry 221.) In addition to Motions for Judgment on the Pleadings, the following activity occurred after the Court resolved Defendants' Motions to Dismiss: Defendant West Coast was dismissed for Plaintiffs' failure to effectuate service of process (Dkt. Entry 136); Defendant Bankers First was dismissed because Plaintiffs did not file an Amended Complaint with respect to Counts Five, Six, Nine and Ten— thus Bankers First was no longer included in the case (Dkt. Entry 135); Plaintiff Charmaine Cooper agreed to the dismissal of Bank of America (Dkt. Entry 178); the PK Defendants agreed to dismiss without prejudice their cross-claim against Indy-Mac (Dkt. Entry 197); and Defendant New Century Mortgage Corporation filed a Suggestion of Bankruptcy, thus staying this litigation as to it. (Dkt. Entry 228.)
As a result of pretrial rulings and voluntary dismissal of parties and claims, the following are the extant claims of each group of Plaintiffs: Rayon McLean and Natalie Wilson have RICO and UTPCPL claims against the PK Defendants and Lisa Gibson. Almus and Marilyn Wilson have RICO and UTPCPL claims against the PK Defendants and Lisa Gibson, as well as a RICO conspiracy claim against Firstar and Ocwen. Marco and Maria Yagual have RICO and UTPCPL claims against the PK Defendants as well as a RICO conspiracy claim against the IMC Defendants. Finally, Charmaine Cooper has RICO and UTPCPL claims against the PK Defendants and Jenny Centrella, as well as a RICO conspiracy claim against M & T Bank.
Following discovery, the remaining Defendants moved for summary judgment. Additionally, Defendant IndyMac has filed a Motion for Summary Judgment on its Counterclaim against Natalie Wilson. (Dkt. Entry 287.) The motions have been fully briefed and are now ripe for resolution.
Because the seven (7) Plaintiffs in this case purchased four (4) different properties and obtained their financing and appraisals from different entities, the factual background of each property and the parties involved will be set forth separately.9
After reading advertisements in New York City newspapers and a booklet provided by Harmon Homes, Plaintiffs Natalie Wilson and Rayon McLean traveled to the Pocono Mountain region of Pennsylvania to investigate the homes for sale. (PK Defs.' App. Mem. Supp. Summ. J. Re: Wilson & McLean, Dkt. Entries 181-3 to -4, at 156a, 246a-247a.) Thereafter, following several telephone conversations and additional visits to Pennsylvania, Ms. Wilson selected Lot 9 in Orchard View Estates, Monroe County, and executed an agreement for the purchase of this property from Eagle Valley Homes. (Id. at 117a, 118a.)
Ms. Wilson made a down payment on her home in two separate installments $2,000 on July 2, 2000 (id. at 124a), and $8,000 on July 14, 2000. (Id. at 125a-126a.) On July 16, 2000, Ms. Wilson paid for an appraisal and credit report, and also signed a mortgage application, authorizing Nations 1st Mortgage Co. to obtain financing for her home.10 (Id. at 124a, 126a.) It is disputed whether the PK Defendants disclosed to Ms. Wilson and Mr. McLean that they owned and controlled Nations 1st Mortgage Co.11 (Id. at 148a.)
Ms. Wilson and Mr. McLeans' attempt to secure financing to construct a home ultimately failed when Nations 1st Mortgage Co. could not obtain a lender. As a result, Ms. Wilson and Mr. McLean wanted to withdraw their deposit, but Nations 1st Mortgage Co. allegedly insisted on keeping the deposit and purportedly coerced Ms. Wilson and Mr. McLean into purchasing an already constructed home on Lot 8 in Mountain Terrace. (Id. at 207a-208a.)12
After Ms. Wilson decided to purchase Lot 8 in Mountain Terrace, Nations 1 st Mortgage Co. obtained two mortgages for her, the first mortgage from IndyMac Bank in the amount of $188,000 and the second mortgage from Bank One in the amount of $47,000. (PK Defs.' App. Mem. Supp. Summ. J. Re: Wilson & McLean, at 132a-135a.) The PK Defendants allegedly advised Ms. Wilson and Mr. McLean that the assistance of an attorney at the closing would not be necessary.13 (Id. at 227a.)
Ms. Wilson executed the mortgage agreements on September 11, 2000, and September 14, 2000, respectively. (PK Defs.' App. Mem. Supp. Summ. J. Re: Wilson & McLean, at 132a-135a.) At the closing of the second mortgage with Bank One, Ms. Wilson had insufficient funds to close, so the PK Defendants lent her an additional $2,598.65 to cover the difference between her loans and the total costs (including closing costs).14 (Id. at 136a.)
As part of the loan application process, Lisa Marie Appraisal Service appraised Ms. Wilson's property on August 7, 2000, at $235,000, and subsequently submitted the appraisal to IndyMac Bank.15 (Id. at 137a-146a.) Ms. Wilson and Mr. McLean assert that the appraisal proved problematic because it listed...
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