Yanes v. Ocwen Loan Servicing, LLC
| Decision Date | 12 February 2015 |
| Docket Number | 13-CV-2343(JS)(ARL) |
| Parties | PEDRO YANES, Plaintiff, v. OCWEN LOAN SERVICING, LLC, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
APPEARANCES
For Plaintiff:
Michael E. Herskowitz, Esq.
Law Office of Michael E. Herskowitz
1999 Flatbush Avenue, Suite 201
Brooklyn, NY 11234
Michael Andrew Lehrman, Esq.
The Hoffman Law Group, P.A.
1999 Flatbush Avenue, Suite 201
Brooklyn, NY 11234
For Defendant:
Brian M. Forbes, Esq.
David S. Versfelt, Esq.
Robert Bruce Allensworth, Esq.
Robert W. Sparkes, Esq.
K&L Gates LLP
One Lincolon Street
Boston, MA 02111
This dispute concerning mortgage loan modifications was commenced on April 17, 2013 by fifty-four named plaintiffs against thirteen defendants. Various parties were dismissed voluntarily and on April 14, 2014, the Court severed and dismissed the claims of all but the first named plaintiff, Pedro Yanes ("Yanes"), finding that each plaintiff's dispute arose out of a separatetransaction. See Yanes v. Ocwen Loan Servicing, LLC, No. 13-CV-2343, 2014 WL 1428013, at *3 (E.D.N.Y. Apr. 14, 2014). Yanes was given leave to replead and he filed a Second Amended Complaint Defendant Ocwen Loan Servicing, LLC ("Ocwen") now moves to dismiss the Second Amended Complaint. (Docket Entry 86.) For the following reasons, Ocwen's motion to dismiss is GRANTED.
Yanes took out a mortgage on his home, which is currently serviced by Ocwen. (SAC ¶ 5.) Yanes requested a mortgage loan modification from Ocwen because he was experiencing financial problems. (SAC ¶ 8.) He claims, however, that Ocwen engaged in certain "illegal" practices with respect to his loan modification. Specifically, Yanes claims Ocwen: (1) "ma[de] the loan application process as onerous and complicated as possible," (2) delayed the application process, and (3) eventually offered "such disadvantageous [loan modification] terms that they rendered performance impossible." (SAC ¶¶ 16-20.) Yanes claims that under the federal Home Affordable Modification Program ("HAMP"), Ocwen was obligated to modify qualified loans "to reduce the burden to homeowners." (SAC ¶ 7.)
After requesting a loan modification, Ocwen required Yanes to submit a "loan modification package" and represented that "following the submission and review of [the] completed modification package," Yanes would receive terms for a "trial modification." (SAC ¶ 12.) Yanes understood that if he successfully made monthly payments under the terms of the trial loan modification, he would be given a permanent mortgage modification. (SAC ¶ 12.) By submitting the documents Ocwen requested in the loan modification package, Yanes alleges that he "accepted Defendant's offer" thereby forming a contract. (SAC ¶ 13.)
According to the Complaint, Ocwen delayed the application process and made it onerous by "providing conflicting information . . . regarding what was required" and making Yanes re-submit documents he already sent to Ocwen. (SAC ¶ 16.) Yanes alleges that after he overcame these obstacles, Ocwen provided him with loan modification terms, but the terms "failed to lower [his] monthly payment in any meaningful way" and "did not extend the life of the loan, while burdening him with substantial arrears and penalties." (SAC ¶¶ 20-21.) Unable to make his mortgage payments, Yanes defaulted. (SAC ¶ 22.)
Yanes alleges that Ocwen operated a "fraudulent loan modification program" and merely "purport[ed] to offer the possibility of a loan modification agreement" while actuallykeeping the loans it serviced in default. (SAC ¶ 38.) Specifically, based on the above facts, Yanes brings claims against Ocwen for breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, fraudulent concealment, unjust enrichment, for violations of New York General Business Law § 349, and violations of the Real Estate Settlement Procedures Act ("RESPA"). (SAC ¶¶ 46-101.) Ocwen moves to dismiss all of Yanes' claims. (Docket Entries 86-87.)
In deciding a Rule 12(b)(6) motion to dismiss, the Court applies a "plausibility standard," which is guided by "[t]wo working principles." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009); accord Harris v. Mills, 572 F.3d 66, 71-72 (2d Cir. 2009). First, although the Court must accept all allegations as true, this "tenet" is "inapplicable to legal conclusions;" thus, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678; accord Harris, 572 F.3d at 72. Second, only complaints that state a "plausible claim for relief" can survive a Rule 12(b)(6) motion to dismiss. Iqbal, 556 U.S. at 679. Determining whether a complaint does so is "a context-specific task that requires the reviewing court to draw onits judicial experience and common sense." Id.; accord Harris, 572 F.3d at 72.
Furthermore, in deciding a motion to dismiss, the Court is confined to "the allegations contained within the four corners of [the] complaint." Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 71 (2d Cir. 1998). However, this has been interpreted broadly to include any document attached to the complaint, any statements or documents incorporated in the complaint by reference, any document on which the complaint heavily relies, and anything of which judicial notice may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002) (citations omitted); Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir. 1991).
Yanes alleges that a contract was formed between Ocwen and himself and that Ocwen breached the contract. "In order to state a claim of breach of contract, the complaint must allege: (i) the formation of a contract between the parties; (ii) performance by the plaintiff; (iii) failure of defendant to perform; and (iv) damages." Johnson v. Nextel Commc'ns, Inc., 660 F.3d 131, 142 (2d Cir. 2011) (citing Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 177 (2d Cir. 2004)). To adequately allege the first element, the existence of an agreement, "a plaintiff must plead the provisions of thecontract upon which the claim is based." James v. Countrywide Fin. Corp., 849 F. Supp. 2d 296, 322 (E.D.N.Y. 2012) (quoting Howell v. Am. Airlines, Inc., No. 05-CV-3628, 2006 WL 3681144, at *3 (E.D.N.Y. Dec. 11, 2006)). The plaintiff "need not attach a copy of the contract to the complaint or quote the contractual provisions verbatim." Id. (citations omitted). "However, the complaint must at least set forth the terms of the agreement upon which liability is predicated by express reference." Id. (internal quotations marks omitted).
Here, Yanes failed to sufficiently plead the terms of the agreement that Ocwen breached. The Amended Complaint states that Ocwen sent Yanes a "modification application package" which required him to "provide documentation" and stated that "following the submission and review of a completed modification package" Yanes would be given "terms to make payments as part of a trial modification." (SAC ¶¶ 11-12.) Yanes characterizes his receipt of Ocwen's modification package as an "offer[]" which he accepted by "performance of the terms specified in Defendant's offer." (SAC ¶ 14.) Yanes further claims that Ocwen breached the contract by making the application process "onerous and complicated" and by eventually offering Yanes "such disadvantageous [modification] terms that they rendered [his] performance impossible." (SAC ¶ 16, 20.) Nowhere in his narrative, however, does Yanes set forth the specific terms of the contract he claims Ocwen breached.It is unclear from the face of the Second Amended Complaint whether Yanes is alleging that Ocwen beached the terms of the trial modification application, the terms of a loan modification agreement, or both. Neither agreement is attached to the Complaint or discussed in sufficient detail to piece together their material terms. Without pleading the terms of the contract or contracts that Yanes relies upon, his claim fails. See James v. Countrywide Fin. Corp., 849 F. Supp. 2d 296, 322 (E.D.N.Y. 2012) (); Howell v. Am. Airlines, Inc., No. 05-CV-3628, 2006 WL 3681144, at *4 (E.D.N.Y. Dec. 11, 2006) (); Valentini v. Citigroup, Inc., 837 F. Supp. 2d 304, 327 (S.D.N.Y. 2011) (); Tray-Wrap, Inc. v. Veneman, No. 02-CV-6898, 2004 WL 2346619, at *4 (S.D.N.Y. Oct. 18, 2004) (); cf. Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 556 (7th Cir. 2012) ().
Yanes argues that his breach of contract claim should not be dismissed because the pleading requirements of his claim is governed by Rule 9(c) of the Federal Rules of Civil Procedure, which sets forth the standard for pleading conditions precedent. Specifically, Rule 9(c) provides that "[i]n pleading conditions precedent, it suffices to allege generally that all conditions precedent have occurred or been performed." FED. R. CIV. P. 9(C). Plaintiff claims that because he adequately pled the performance of certain conditions precedent, he alleged the necessary elements of a breach of contract claim. (Pl.'s Opp., Docket Entry 89, at 2-3.) But Yanes argument misses the point. The Second Amended...
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