Garrasi v. Christiana Trust et alMOTION to Dismiss for Failure to State a ClaimN.D.N.Y.November 8, 20161 NY 832758v.1 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK ROBERT GARRASI, Plaintiff vs. CHRISTIANA TRUST, a division of Wilmington Savings Fund Society, FSB, not in its individual capacity, but solely as Trustee of ARLP Trust 3; and FAY SERVICING, LLC, Defendants. NOTICE OF MOTION Case No. 1:16-cv-1035 (GTS) (DEP) PLEASE TAKE NOTICE that upon the accompanying Memorandum of Law in Support of Defendants’ Motion to Dismiss and the Attorney Declaration of Samantha Ingram in Support of Defendants’ Motion to Dismiss and the exhibits thereto, Defendants Christiana Trust, a division of Wilmington Saving Fund Society, FSB, not in its individual capacity, but solely as Trustee of ARLP Trust 3, and Fay Servicing, LLC’s (collectively, “Defendants”), by and through their counsel Locke Lord LLP, will hereby move this Court, before the Honorable Judge Glenn T. Suddaby, United States District Judge, at the United States District Court for the Northern District of New York at the courthouse located at 100 S. Clinton Street, Syracuse, New York 13261, on December 15, 2016 at 10:00 a.m., for an order pursuant to Federal Rule of Civil Procedure 12(b)(6) dismissing Plaintiff’s Complaint in its entirety and for such other and further relief as is deemed just and proper by this Court. Pursuant to the Local Rules for the United States District Court for the Northern District of New York, Plaintiff shall serve and file his opposition to this motion, if any, no later than Case 1:16-cv-01035-GTS-DEP Document 9 Filed 11/08/16 Page 1 of 2 2 NY 832758v.1 November 28, 2016, and Defendants shall serve and file their reply papers in support of this motion no later than December 4, 2016. Dated: New York, New York November 8, 2016 /s/ Joseph N. Froehlich Joseph N. Froehlich Samantha Ingram LOCKE LORD LLP Brookfield Place 200 Vesey Street, 20th Floor New York, NY 10281 212-415-8600 jfroehlich@lockelord.com singram@lockelord.com Attorneys for Defendants CERTIFICATE OF SERVICE I, JOSEPH N. FROEHLICH, an attorney, hereby certify that on the 8th day of November, 2016, a true and correct copy of the foregoing NOTICE OF MOTION was served via U.S. Mail on pro se plaintiff at the address set forth below: Robert Garrasi P.O. Box 643 Clifton Park, NY 12065 Further, on the 8th day of November, 2016, a true and correct copy of the foregoing NOTICE OF MOTION was served via ECF on all parties entitled to notice. /s/ Joseph N. Froehlich Joseph N. Froehlich Case 1:16-cv-01035-GTS-DEP Document 9 Filed 11/08/16 Page 2 of 2 NY 832754v.1 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK ROBERT GARRASI, Plaintiff vs. CHRISTIANA TRUST, a division of Wilmington Savings Fund Society, FSB, not in its individual capacity, but solely as Trustee of ARLP Trust 3; and FAY SERVICING, LLC, Defendants. Case No. 1:16-cv-01035 (GTS) (DEP) MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS Joseph N. Froehlich Samantha Ingram LOCKE LORD LLP Brookfield Place 200 Vesey Street, 20th Floor New York, NY 10281 212-415-8600 jfroehlich@lockelord.com singram@lockelord.com Attorneys for Defendants Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 1 of 12 i NY 832754v.1 TABLE OF CONTENTS Page PRELIMINARY STATEMENT .....................................................................................................1 STATEMENT OF FACTS ..............................................................................................................1 ARGUMENT...................................................................................................................................2 I. Standard for a Motion to Dismiss under Fed. R. Civ. P. 12(b)(6). ................................2 II. Plaintiff, a Stranger to the Loan, Lacks Standing to Assert RESPA and TILA Claims. .................................................................................................................3 III. Plaintiff’s TILA Claim Is Barred by the Applicable Statute of Limitations..................4 IV. Plaintiff Previously Tried to Assert Statutory Claims Belonging to Others..................5 CONCLUSION................................................................................................................................7 Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 2 of 12 ii NY 832754v.1 TABLE OF AUTHORITIES Page(s) Cases Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328 (2d Cir. 2006).......................................................................................................2 Alexander v. Bank of Am., No. 08 C 4948, 2010 WL 152045 (N.D. Ill. Jan. 15, 2010) ......................................................3 Alston v. Countrywide Fin. Corp., 585 F.3d 753 (3rd Cir. 2009) .....................................................................................................3 Ashcroft v. Iqbal, 556 U.S. 662 (2009)...................................................................................................................3 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)...............................................................................................................2, 3 In re Carter, 553 F.3d 979 (6th Cir. 2009) .....................................................................................................3 Johnson v. Ocwen Loan Servicing, 374 F. App’x 868 (11th Cir. 2010) ............................................................................................3 Le Bouteiller v. Bank of N.Y. Mellon, No. 14 CIV. 6013 PGG, 2015 WL 5334269 (S.D.N.Y. Sept. 11, 2015)...................................5 McLean-Laprade v. HSBC, No. 7:12-CV-1774 (N.D.N.Y. July 30, 2013). ..........................................................................5 Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123 (2d Cir. 2001).......................................................................................................2 Val-Com Acquisitions Trust v. BAC Home Loans Servicing, LP, No. 4:10-CV-316, 2010 WL 5027204 (E.D. Tex. Oct. 27, 2010) .............................................4 Statutes and Rules FED. R. CIV. P. 8 ...........................................................................................................................2, 3 FED. R. CIV. P. 12 .........................................................................................................................1, 2 12 CFR § 226.2 ................................................................................................................................3 Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 3 of 12 iii NY 832754v.1 12 U.S.C. § 2605..............................................................................................................................3 15 U.S.C. § 1602..............................................................................................................................3 15 U.S.C. § 1640..............................................................................................................................4 15 U.S.C. § 1641..........................................................................................................................4, 5 Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 4 of 12 1 NY 832754v.1 Defendants Christiana Trust, a division of Wilmington Savings Fund Society, FSB, not in its individual capacity, but solely as Trustee of ARLP Trust 3 (“Christiana”) and Fay Servicing, LLC (“Fay”) (collectively, “Defendants”), by and through their attorneys, Locke Lord LLP, submit this Memorandum of Law, and the accompanying Attorney Declaration of Samantha Ingram dated November 8, 2016 (“Atty. Dec.”), in support of their motion to dismiss Plaintiff Robert Garrasi’s (“Plaintiff”) Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). PRELIMINARY STATEMENT Plaintiff’s Complaint must be dismissed because it attempts to assert claims that do not belong to Plaintiff, and in fact belong to a borrower who is not involved or named in this case. As a stranger to the borrower’s loan, Plaintiff does not have standing to bring claims under TILA and RESPA for Defendants’ purported violations of those statutes. Plaintiff has, in fact, attempted to assert statutory claims for which he does not have standing before other New York courts, but those efforts have not yet been successful. Even if Plaintiff were somehow permitted to bring this case against Defendants for the harm they purportedly caused someone else, Plaintiff’s TILA claim is time barred. Plaintiff’s Complaint must therefore be dismissed. STATEMENT OF FACTS Doris Marrero (“Marrero”), an individual who is not directly involved in this case, received a mortgage loan (the “Loan”). (Compl, Ex. C.) Although the Complaint provides no other information about Marrero’s Loan, Plaintiff alleges that a mortgage assignment occurred on March 29, 2014. (Compl. ¶ 19.) Fay allegedly notified Marrero about the transfer of her Loan on August 27, 2015. (Compl. ¶ 18, Ex. C.) On or about September 16, 2016, Marrero purportedly assigned a list of potential claims against a number of companies, including Defendants, to Plaintiff in exchange for $1.00. (Compl. ¶ 16, Ex. A.) This agreement was commemorated in a one-page document entitled, Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 5 of 12 2 NY 832754v.1 “Assignment of Claims and/or Choses in Action” and in it, Marrero purportedly assigned her claims for violations of the Truth in Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”) to Plaintiff. (Compl., Ex. A.) Over two years after the alleged transfer of Marrero’s Loan and Marrero’s assignment of certain claims to Plaintiff, Plaintiff commenced this action. ARGUMENT Plaintiff’s attempt to assert statutory claims belonging to a seemingly random borrower must fail. Plaintiff, a complete stranger to Marrero’s Loan and any rights she may have under TILA and RESPA, has no standing to assert claims that would belong only to a borrower, and Plaintiff has not alleged, and cannot allege, that he was damaged by Defendants’ purported violation of these statutes. Moreover, even if Plaintiff were permitted to raise these statutory claims, his TILA claim is barred by the applicable statute of limitations. This is not the first time Plaintiff has attempted to assert statutory claims that were purportedly assigned to him by unrelated borrowers, and the Court should not permit Plaintiff to get away with his scheme here. I. Standard for a Motion to Dismiss under Fed. R. Civ. P. 12(b)(6). When considering a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the Court determines whether a plaintiff has “fail[ed] to state a claim upon which relief can be granted.” In doing so, “the district court . . . accept[s] all allegations in the complaint as true and draw[s] all inferences in the non-moving party’s favor.” Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123 (2d Cir. 2001). But “[c]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to [defeat] a motion to dismiss.” Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006) (alterations in original). The Court must also ensure that the pleading requirements of Federal Rule of Civil Procedure 8(a)(2) are satisfied. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 6 of 12 3 NY 832754v.1 Although Rule 8(a)(2) does not require detailed factual allegations, it requires “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555. “‘[N]aked assertion[s] devoid of ‘further factual enhancement’” will not do. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557). II. Plaintiff, a Stranger to the Loan, Lacks Standing to Assert RESPA and TILA Claims. Plaintiff’s attempt to assert statutory claims purportedly assigned to him by a random borrower fails because only borrowers can bring claims under TILA and RESPA and Plaintiff has no independent standing to assert the claims raised in his Complaint. Claims for violations of TILA and RESPA can only be asserted by a consumer or borrower who applies for or is a party to a loan transaction. Alexander v. Bank of Am., No. 08 C 4948, 2010 WL 152045, at *2 (N.D. Ill. Jan. 15, 2010) (granting lender’s motion to dismiss based on finding that party lacked standing to assert claims under TILA or RESPA because he was not a borrower). Under TILA, a consumer is limited to a natural person “to whom credit is offered or extended.” 15 U.S.C. § 1602(i); see also 12 CFR § 226.2(a)(11). Likewise, RESPA only provides for claims by individuals who receive a loan. See In re Carter, 553 F.3d 979, 989 (6th Cir. 2009); Alston v. Countrywide Fin. Corp., 585 F.3d 753, 763 (3rd Cir. 2009). Moreover, RESPA specifically provides that “[w]hoever fails to comply with any provision of this section shall be liable to the borrower for each such failure.” 12 U.S.C. § 2605(f) (emphasis added). Since Plaintiff, a stranger to Marrero’s Loan, is neither a “consumer” under TILA nor an “applicant” or a “borrower” with regard to the Loan under RESPA, Plaintiff lacks standing to assert the causes of action raised in his Complaint. See Johnson v. Ocwen Loan Servicing, 374 F. App’x 868, 874 (11th Cir. 2010) (although mother transferred residence to daughter, “the district court did not err in finding that, because [borrower’s daughter] was not a debtor or Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 7 of 12 4 NY 832754v.1 ‘consumer’ of the loan, she was not protected by [TILA or RESPA] and, therefore, lacked standing.”). Plaintiff’s Complaint contains no allegations about how he was damaged by Defendants’ purported failure to provide Marrero with timely notice that the ownership of her loan transferred - and he cannot allege any such harm because he has no affiliation or connection to Marrero’s Loan. In fact, Plaintiff’s Complaint includes almost no mention of Plaintiff himself, focusing largely on Marrero, her Loan and the ways in which Defendants allegedly wronged Marrero. As a mere outsider to Marrero’s Loan and Marrero’s interactions and relationship with Defendants, Plaintiff lacks standing to assert claims for TILA and RESPA. Additionally, Plaintiff’s purported status as an assignee of Marrero’s claims does not remedy the deficiencies in his Complaint. Even assuming that the Assignment of Claims and/or Choses in Action is valid (Compl., Ex. A), Plaintiff still lacks standing to raise the TILA and RESPA claims because the Complaint does not, and cannot, allege that Plaintiff was harmed by these purported statutory violations. See Val-Com Acquisitions Trust v. BAC Home Loans Servicing, LP, No. 4:10-CV-316, 2010 WL 5027204, at *2 (E.D. Tex. Oct. 27, 2010) (finding that plaintiff, who alleged to be an agent of consumers/borrowers, lacked standing to sue for violations of RESPA and TILA because plaintiff did “not assert an injury in fact that is separate from the alleged injuries suffered by the [borrowers/consumers].”), report and recommendation adopted, No. 4:10-CV-316, 2010 WL 5027196 (E.D. Tex. Dec. 3, 2010). III. Plaintiff’s TILA Claim Is Barred by the Applicable Statute of Limitations. Even if Plaintiff did have standing to raise a TILA claim related to Marrero’s loan, which he does not, that claim would be time barred by the applicable statute of limitations. Claims under TILA, such as Plaintiff’s cause of action under 15 U.S.C. § 1641(g), must be brought “within one year from the date of the occurrence of the violation.” 15 U.S.C. § 1640(e); see also Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 8 of 12 5 NY 832754v.1 McLean-Laprade v. HSBC, No. 7:12-CV-1774 LEK/ATB, 2013 WL 3930565, at *3 (N.D.N.Y. July 30, 2013). Plaintiff’s Complaint alleges that Marrero’s Loan was assigned in March 2014, but that Christiana did not notify Marrero of the transfer until August 27, 2015. (Compl. ¶ 29.) Plaintiff alleges that this late notice violated TILA Section 1641(g) because Christiana did not disclose to Marrero that the ownership of her loan had changed within the required 30-day window. According to Plaintiff’s Complaint, Christiana violated TILA in or around April 2014, or 30 days after Marrero’s loan was assigned.1 Plaintiff’s TILA claim is therefore time barred because Plaintiff’s Complaint is dated August 19, 2016, over two years after Christiana’s purported violation of Section 1641(g). See Le Bouteiller v. Bank of N.Y. Mellon, No. 14 CIV. 6013 PGG, 2015 WL 5334269, at *10 (S.D.N.Y. Sept. 11, 2015). IV. Plaintiff Previously Tried to Assert Statutory Claims Belonging to Others In at least two other cases before New York courts, Plaintiff brought claims against similarly situated defendants arguing that borrowers assigned their statutory claims to him. In fact, Plaintiff first attempted to raise the exact same TILA cause of action that Marrero purportedly assigned to him in a prior state court action. Prior to commencing this federal court action, Plaintiff attempted to assert a TILA claim assigned to him by Marrero against the trust named in this case’s caption, the ARLP Trust 3, before a New York state court. (Atty. Dec., Ex. A.) The TILA cause of action raised in this case and the TILA claim asserted before the state court are almost identical, except for the fact that here Plaintiff’s TILA claim is asserted against Christiana and in the state court Plaintiff’s TILA claim was levied against “ARLP” - a trust and 1 Interestingly, Plaintiff alleges that Defendants violated TILA and RESPA months before Marrero allegedly assigned her claims to Plaintiff in September 2015. Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 9 of 12 6 NY 832754v.1 the purported assignee of Marrero’s mortgage. (Compare Compl., pp. 4-6 with Atty. Dec., Ex. A, pp. 4-5.)2 On May 13, 2016, the New York Supreme Court, Schenectady County, held that it did not have jurisdiction over Plaintiff’s state court action because of procedural defects with Plaintiff’s commencement of the case. (Atty. Dec., Ex. B.)3 Even though the dismissal was based on a procedural defect, the Supreme Court’s order further stated that, “if [it] had the required jurisdiction to consider the parties’ claims, the plaintiff’s complaint would have been dismissed pursuant to … CPLR § 3211(a)(3) and § 3211(a)(4) as the plaintiff lacks standing in this matter and the claims raised by the plaintiff herein should have been raised by another individual by way of a counterclaim(s) in another action pending in Suffolk County.” (Atty. Dec., Ex. B, p. 2) (emphasis added). The state court is likely referring to the foreclosure action that Plaintiff alleges is pending against Marrero.4 (Compl., ¶¶ 30-31.) Therefore, even though the state court’s dismissal was based on procedural issues, the court identified another fatal flaw with Plaintiff’s TILA claim - namely that Plaintiff did not have standing to raise a TILA claim that belonged to another individual. In addition to the substantially similar case Plaintiff already filed in state court, Plaintiff tried a similar tactic in an unrelated case before this Court in which he alleged that another random borrower assigned him his statutory claims under the Fair Credit Reporting Act 2 Although both Fay and Christiana are named as defendants in this case, Plaintiff’s state court action was only brought against “Christiana Trust, a division of Wilmington Savings Fund Society, FSB, not in its individual capacity, but solely as Trustee of ARLP Trust 3.” Plaintiff’s state court complaint refers to “ARLP Trust 3” (abbreviated to “ARLP”) as the defendant, but this is the same entity referred to as “Christiana” in this case. (Compl. ¶ 1.) 3 Plaintiff only filed his state court complaint with the Schenectady City Court, and not with the Supreme Court, and therefore the Schenectady Supreme Court held that Plaintiff did not properly commence an action with the Supreme Court. (Atty. Dec., Exs. A, B.) 4 The New York State Unified Court System’s eCourts website, available at https://iapps.courts.state.ny.us/webcivil/FCASMain, indicates that there is an active foreclosure pending before the Suffolk County Supreme Court captioned, BAC Home Loans Servicing L.P. v. Marrero, Index No. 043244/2010. Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 10 of 12 7 NY 832754v.1 (“FCRA”) and Fair Debt Collection Practices Act (“FDCPA”). (Atty. Dec., Ex. C, Case No. 14- 01532, Docket No. 1-1.) In Garrasi v. Rubin & Rothman, LLC, Case No. 14-cv-01532-BKS- CFH (N.D.N.Y.), defendant Capital One Bank (USA), N.A. (“Capital One”) moved to dismiss Plaintiff’s FDCPA and FCRA claims, which were purportedly assigned to him by another borrower. (Case No. 14-01532, Docket No. 4.) On July 30, 2015, the Honorable Judge Sannes granted Capital One’s motion to dismiss for failure to state a claim under the FDCPA and FCRA. (Atty. Dec., Ex. D, Case No. 14-01532, Docket No. 11.) Plaintiff should not be permitted to continue asserting statutory claims belonging to others. CONCLUSION For the reasons stated above, the Court should grant Defendants’ motion to dismiss Plaintiff’s Complaint. Dated: New York, New York November 8, 2016 /s/ Joseph N. Froehlich Joseph N. Froehlich Samantha Ingram LOCKE LORD LLP Brookfield Place 200 Vesey Street, 20th Floor New York, NY 10281 212-415-8600 jfroehlich@lockelord.com singram@lockelord.com Attorneys for Defendants Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 11 of 12 8 NY 832754v.1 CERTIFICATE OF SERVICE I, JOSEPH N. FROEHLICH, an attorney, hereby certify that on the 8th day of November, 2016, a true and correct copy of the foregoing MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’MOTION TO DISMISS was served via U.S. Mail on pro se plaintiff Robert Garrasi at the address set forth below: Robert Garrasi P.O. Box 643 Clifton Park, NY 12065 Further, on the 8th day of November, 2016, a true and correct copy of the foregoing MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’MOTION TO DISMISS was served via ECF on all parties entitled to notice. /s/ Joseph N. Froehlich Joseph N. Froehlich Case 1:16-cv-01035-GTS-DEP Document 9-1 Filed 11/08/16 Page 12 of 12 Case 1:16-cv-01035-GTS-DEP Document 9-2 Filed 11/08/16 Page 1 of 3 Case 1:16-cv-01035-GTS-DEP Document 9-2 Filed 11/08/16 Page 2 of 3 Case 1:16-cv-01035-GTS-DEP Document 9-2 Filed 11/08/16 Page 3 of 3 Exhibit A Case 1:16-cv-01035-GTS-DEP Document 9-3 Filed 11/08/16 Page 1 of 23 13 Por SUPREME COUm i STATE.OF NEW YORK A YJV %ril...OUNTY OF SCHENEC Dmfu%BERT GARRASI, 0 OWN Plai"ntltt. C1 TkAkAnKTC qrDT flic CHRISTIMA I INUST A DIVISION %jr WILMINGTON SAVINGS FUND SOCIETY, FSB N OT IN ITS INDIVIDUAL CAPACITY., BUT SOLELY nil T W. Prn Ab OF " TmuSTEE ARLF.1jAXUb1 3, 0 nil I nil I -_ -_ a TO* CHRISTLANA TAUST, TmuSTEE. 4w"mmm You are hereby su oned to appear in the Schenec.tady County Courthouse, located at 612 State Street, Schenectady, New York, by serving an Answer* to the annexed co plaint upon the plaintiff at the address st.ate-d below W-l*thi*n the ti e provided by law as noted belo'wlo upon your fa'1*1Ur'e to so answer, J*Udg ent- will be taken a gai*nst you for the relief de anded in the co plaint, -together wl*th the cost's of this action. You need not physl*cally go to the 'court to serve an Answer. Plai*ntiff s address: 182.1 Lenox. Ro- . ad, Schenectady, NY 12308 Defendant s Address.* WSFS, dba Christiana Trust Attno ARLP Trust 3 500 Delaware. Ave, I j ,h Flo,or, W191 in gton DE 19801 PD ate Februar]y 2, 201 Robert Garrasi, Pro Se Plaintiff NOTE: The law provi"des that if this s,u mons is served by . its deli*very to you personall within y 0 the county of Schenectady, you ust appear and answer w'ithi*n 20 days after such service or if this su ons is served by 1*,ts deli*very to any person other than you personally, or is served outside the County of Schenectad ~ r or by ublication, or by any eans other than personal 31 P delivery to you within- the County of SC'henectady, you are all.owe'd 30 days, after service is co plete within which to appear and answer. Case 1:16-cv-01035-GTS-DEP Document 9-3 Filed 11/08/16 Page 2 of 23 CITY O ~F~ SCH001wENEw"ICTAu""""i" STATE OF NEW YOrVA ROBERT GARRASI, VsqP a . 0 Plaintiff 9 Index No. a a 0 a 0 W a a Christiana Trust a division of w v il in gton Sa,wngs Fund S ~ociety, FSB, not in its individual capacity, but solely as Trustee of ARLP Trust 3 P