Russick v. Wells Fargo, Inc.

BRIEF in Support re Motion to Dismiss for Failure to State a Claim

W.D. Pa.April 7, 2017

SL1 1458949v1 104945.00796 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA ROSANNE RUSSICK, Plaintiff vs. WELLS FARGO, INC. D/B/A WELLS FARGO HOME MORTGAGE, Defendant : : : : : : : : : : : : : Case No. 2:17-cv-00149-NBF [Electronically Filed] DEFENDANT WELLS FARGO HOME MORTGAGE’S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF’S AMENDED COMPLAINT PURSUANT TO RULE 12(b)(6) Defendant Wells Fargo Home Mortgage, an unincorporated division of Wells Fargo Bank, N.A. (“Wells Fargo”), incorrectly identified in the Amended Complaint as “Wells Fargo, Inc. d/b/a Wells Fargo Home Mortgage”, submits this Memorandum of Law in support of its Motion to Dismiss Plaintiff’s Amended Complaint Pursuant to Fed. R. Civ. P. 12(b)(6) (the “Motion”). I. INTRODUCTION AND PROCEDURAL HISTORY Plaintiff Rosanne Russick (the “Plaintiff” or “Ms. Russick”) commenced this action by filing a complaint (the “Complaint”) against Wells Fargo in the Court of Common Pleas of Lawrence County, Pennsylvania. On February 2, 2017, Wells Fargo timely removed the state court action to this Court based upon federal question jurisdiction. [Docket No. 1]. In the Complaint, Ms. Russick attempted to assert claims against Wells Fargo for alleged violations of the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 et seq. (the “ECOA”) and the Fair Housing Act, 42 U.S.C. §§ 3601 et seq. (the “FHA”). [Complaint, ¶¶ 3, 19]. The causes of Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 1 of 19 -2- SL1 1458949v1 104945.00796 action were based upon Ms. Russick’s contention that Wells Fargo’s denial her application to assume an existing mortgage obligation was based “solely by age discrimination” in violation of the ECOA and FHA. [Complaint, ¶ 19]. On February 9, 2017, Wells Fargo filed a Motion to Dismiss the Complaint Pursuant to Rule 12(b)(b) along with a memorandum of law in support thereof (the “First Motion to Dismiss”). [Docket No. 6]. In the First Motion to Dismiss, Wells Fargo identified numerous and significant deficiencies in the Complaint and why Ms. Russick had failed to state and could not plausibly establish her claims of discrimination against Wells Fargo. [First Motion to Dismiss]. On March 2, 2017, Ms. Russick filed a Response in opposition to the First Motion Dismiss (the “Response”). [Docket No. 14]. In her Response, Ms. Russick did not respond to the arguments raised in Wells Fargo’s First Motion to Dismiss but instead sought leave to file an amended complaint, a copy of which was attached to the Response. [See id.]. Wells Fargo stipulated to the filing of the proposed amended complaint. [See Joint Stipulation, Docket No. 15]. On March 10, 2017, the Court entered an order directing Ms. Russick to file her amended complaint by March 24, 2017 and further directing Wells Fargo to file its response by April 7, 2017. [Docket No. 16]. On March 27, 2017, Ms. Russick filed her Amended Complaint wherein she again attempts to assert claims against Wells Fargo for violations of the ECOA and FHA. [Docket No. 17]. In addition to contending that Wells Fargo discriminated against her on the basis of age, in the Amended Complaint Ms. Russick now alleges that in denying the application of her and her Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 2 of 19 -3- SL1 1458949v1 104945.00796 son Ricky Gay1 to assume the Mortgage (hereinafter defined) Wells Fargo discriminated against Ms. Russick on the basis of sex, marital status and the disability of her son Ricky Gay. [Amended Complaint, ¶ 39]. Despite Wells Fargo’s detailed Motion to Dismiss, the Amended Complaint fails to cure all of the deficiencies of the Complaint previously identified by Wells Fargo and Ms. Russick has again failed to state any claims against Wells Fargo under the ECOA or the FHA for which relief may be granted. As such, the Amended Complaint should be dismissed in its entirety with prejudice and without leave to amend. See Fed. R. Civ. P. 12(b)(6). II. THE FACTS ALLEGED IN THE AMENDED COMPLAINT AND FACTS IN OTHER DOCUMENTS OR PUBLIC RECORDS THAT THIS COURT CAN PROPERLY CONSIDER WHEN RULING ON THIS MOTION TO DISMISS Pursuant to a deed dated December 19, 2003 (the “2003 Deed”), Joanna L. Gay (“Ms. Gay”) and her brother Ricky Gay a/k/a Richard Gay (“Mr. Gay”) purchased certain real property located at 1506 Jackson Avenue, New Castle, Pennsylvania 16101 (the “Property”). [Complaint, ¶ 4; Amended Complaint, ¶ 10]. A true and correct copy of the 2003 Deed is attached hereto as Exhibit “1” and incorporated herein by reference. 2 After purchasing the Property, Ms. Gay and Mr. Gay resided there with their mother, Ms. Russick. [Amended Complaint, ¶ 13]. Ms. Russick is alleged to be 60 years old and currently resides at the Property. [Amended Complaint, ¶¶ 1, 3, 13-14, 22]. 1 In the Complaint, Ms. Russick identified and referred to her son as Richard Gay rather than Ricky Gay. [Cf. Complaint, ¶¶ 4-5 (averring that Joanna Gay and Richard Gay purchased the Property (hereinafter defined) and obtained a mortgage thereon) with Amended Complaint, ¶¶ 10-11) (averring same)]. There is no dispute that Ricky Gay and Richard Gay are the same person. 2 Considering this Motion to Dismiss, the Court may consider the Deed and other publicly recorded documents attached hereto and of which it may take judicial notice. See discussion, infra, p. 9-10; Fed. R. Evid. 201. Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 3 of 19 -4- SL1 1458949v1 104945.00796 On December 29, 2003, Ms. Gay and Mr. Gay obtained a loan from FirstMerit Mortgage Corporation (“FirstMerit”) in the amount of $36,083.00 (the “Loan”). [Amended Complaint, ¶¶ 11-12, 14; Mortgage, p. 1]. To secure repayment of the Loan, on or about December 29, 2003, Ms. Gay and Mr. Gay executed a mortgage (the “Mortgage”) in favor of FirstMerit and its successors and assignees granting FirstMerit a lien and security interest the Property. [Amended Complaint, ¶¶ 11-12, 14; Mortgage]. The Mortgage was recorded with the Recorder of Deeds for Lawrence County, Pennsylvania (the “Recorder of Deeds”) on December 30, 2003. [Mortgage]. A true and correct copy of the recorded Mortgage is attached hereto as Exhibit “2” and incorporated herein by reference. On December 29, 2003, FirstMerit executed an assignment of the Mortgage to Washington Mutual Bank, FA (the “Washington Mutual Assignment”) which assignment was recorded with the Recorder of Deeds on or about December 30, 2003. [Amended Complaint, ¶ 15]. A true and correct copy of the recorded Washington Mutual Assignment is attached hereto as Exhibit “3” and incorporated herein by reference. Thereafter, on or about January 9, 2007, Washington Mutual f/k/a Washington Mutual Bank, FA executed an assignment of the Mortgage to Wells Fargo Bank, N.A. (the “Wells Fargo Assignment”) which was recorded with the Recorder of Deeds on or about January 25, 2007. [Amended Complaint, ¶ 15]. A true and correct copy of the recorded Wells Fargo Assignment is attached hereto as Exhibit “4” and incorporated herein by reference. Plaintiff alleges that after Ms. Gay’s marriage, Ms. Gay moved out of the Property because her husband owned a home and the couple wanted to “upgrade to a different property.” [Amended Complaint, ¶¶ 16-17]. Ms. Gay was “not able to obtain a mortgage . . . on a separate residence because she was a signatory on the [M]ortgage.” [Amended Complaint, ¶ 19]. As a Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 4 of 19 -5- SL1 1458949v1 104945.00796 result, Ms. Gay and Ms. Russick allegedly agreed that Ms. Gay would deed the Property to Ms. Russick and Mr. Gay “in exchange for removal of her name . . . from the Mortgage by having . . . [Ms.] Russick, assume the Mortgage.” [Amended Complaint, ¶ 20]. Even though Mr. Gay was already a co-owner of the Property and resides there, Ms. Russick contends that “one of [her] primary motivations for . . . buying this house was that after her decease [sic], her disabled son would have a place to live.” [Amended Complaint, ¶ 5]. In the Amended Complaint, Ms. Russick further avers that she and Mr. Gay applied for “the assumption agreement” with Wells Fargo and that Wells Fargo advised Ms. Russick that “she needed a co-signor with assets and a high credit rating to co-sign the [M]ortgage” and that she and Mr. Gay would qualify if she secured a “financially strong co-signer.” [Amended Complaint, ¶¶ 21, 23, 33]. As a result, Ms. Russick asserts that her cousin and counsel in this action, Richard J. Orloski (“Mr. Orloski”), agreed to “co-sign on the mortgage” and that “Mr. Orloski submitted financial documentation showing a credit score in excess of 800 and substantial assets for in excess of the outstanding mortgage.” [Amended Complaint, ¶¶ 24-25]. Ms. Russick claims that Wells Fargo advised her that “if the financial information concerning [Mr.] Orloski was true, the assumption would be approved.” [Amended Complaint, ¶ 26]. As such, Ms. Russick contends that under the “proposed assumption agreement” Ms. Gay would be “replaced by two aged persons, one age 60, the other age 69, and the disabled son, Ricky would remain on the Mortgage, but together with far more security to the bank because of Orloski’s financial strength.” [Amended Complaint, ¶ 31]. Ms. Russick asserts, however, that once she met the requirement of providing a strong co-signor, Wells Fargo “changed the rules and indicated that the strength of the co-signor was irrelevant, and that she must meet the financial requirements irrespective of the strength of the Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 5 of 19 -6- SL1 1458949v1 104945.00796 co-signor.” [Amended Complaint, ¶ 36]. As such, Plaintiff contends that Wells Fargo was not willing to “substitute two elderly borrowers, one male and one female, from one younger borrower even though the elderly co-signor was a fare [sic] more credit worthy borrower.” [Amended Complaint, ¶ 38]. Nowhere in the Amended Complaint, however, does Ms. Russick allege that she alone qualified to assume the Mortgage. [Amended Complaint, generally]. Additionally, the Amended Complaint is devoid of any allegation that in connection with the assumption application that Wells Fargo ever requested any information from Ms. Russick about her age, her sex, her marital status, Mr. Gay’s disability or Mr. Orloski’s age or that Wells Fargo was aware of any of those facts. [See id.]. Also missing from the Amended Complaint is any allegation that Wells Fargo ever communicated to Ms. Russick in any way that her application would have been approved but for her age, sex, marital status, Mr. Gay’s disability or Mr. Orloski’s age. [See id.]. Nonetheless based on the sparse, conclusory allegations in the Amended Complaint and the alleged current status and size of the Mortgage, Ms. Russick alleges that there is a “clear inference” that she was the victim of “age discrimination [directed against her and her co- signor], disability discrimination because her co-applicant was disabled and not a strong wage earner and sex discrimination because she was a divorced female [sex and marital status discrimination].” [Amended Complaint, ¶ 39 (alternation in original)]. As a result of this alleged “illegal age discrimination” Ms. Russick contends that she and Mr. Gay “lost their home” causing them financial losses, emotional distress and “family complications.” [Amended Complaint, ¶ 40]. In the Amended Complaint, however, Ms. Russick admits that she still resides at the Property. [Amended Complaint, ¶ 1]. Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 6 of 19 -7- SL1 1458949v1 104945.00796 By deed dated February 24, 2016, Ms. Gay and Mr. Gay transferred ownership of the Property to Joann Orloski (the “2016 Deed”) which deed was recorded with the Recorder of Deeds on March 1, 2016. A true and correct copy of the recorded 2016 Deed is attached hereto as Exhibit “5” and incorporated herein by reference. The exact relationship between Ms. Russick and Joann Orloski is not disclosed in the 2016 Deed, but the fact that Joann Orloski has the same last name as Ms. Russick’s cousin and counsel in this action plausibly suggest some sort of familial relationship exits. On March 10, 2016, Wells Fargo filed a satisfaction of the Mortgage with the Recorder of Deeds (the “Satisfaction”), wherein Wells Fargo stated that the debt secured by the Mortgage had been paid in full at some point in time prior to the execution of the Satisfaction. A true and correct copy of the recorded Satisfaction is attached hereto as Exhibit “6” and incorporated herein by reference. III. STANDARD OF REVIEW A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of a complaint against the pleading requirements of Rule 8(a)(2). See Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Fisher v. Rite Aid Corp., 764 F. Supp.2d 700, 703 (M.D. Pa. 2011). Under Rule 8(a)(2), a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief, ‘in order to give the defendant fair notice of what the claim is and the grounds upon which it rests.’” Id. at 702 (quoting Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1955 (2007)); Fed. R. Civ. P. 8(a)(2); see also Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). The decisions of the United States Supreme Court in Bell Atlantic v. Twombly, 127 S. Ct. at 1955, and Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2007), shifted the pleading standard under Rule 8(a)(2) from notice pleading to “a more heightened form of pleading, requiring a plaintiff to plead more than the possibility of relief to survive a motion to dismiss.” Fowler v. Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 7 of 19 -8- SL1 1458949v1 104945.00796 UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009); Phillips, 515 F.3d at 230. Following the Twombly and Iqbal decisions, “it is clear that conclusory or ‘bare-bones’ allegations will no longer survive a motion to dismiss: ‘threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.’” Fowler, 578 F.3d at 210 (quoting Iqbal, 129 S. Ct. at 1949). Rather, a plaintiff is obligated to “to provide the grounds of his entitlement to relief” and mere “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 127 S. Ct at 1964-65. Accordingly, to avoid dismissal a plaintiff must allege facts that “‘raise a right to relief above the speculative level.’” Pierce v. QVC, Inc., 555 F. Supp.2d 499, 501 (E.D. Pa. 2008) (quoting Twombly, 127 S. Ct. at 1965)); see also Fowler, 578 F.3d at 210 (providing that a complaint must “set out ‘sufficient factual matter’ to show that the claim is facially plausible.”) (quoting Iqbal, 129 S. Ct. at 1949-50). In light of heightened pleading standard enunciated in Twombly and Iqbal, reviewing a motion to dismiss under Rule 12(b)(6), a district court is required now to undertake a two-part analysis. See Fowler, 578 F.3d at 210; Elbaum v. Thomas Jefferson Univ. Hosps., Inc., Civ. A. No. 13-1358, 2013 WL 6239593, at *1 (E.D. Pa. Dec. 3, 2013). First, a court must separate the factual and legal elements of a claim. Fowler, 578 F.3d at 210; Elbaum, 2013 WL 6239593, at *1. Construing a complaint in the light most favorable to the plaintiff, a court must accept the well- pleaded facts as true. Fowler, 578 F.3d at 210; Elbaum, 2013 WL 62339593, at *1; Pierce, 555 F. Supp.2d at 501. A district court may disregard, however, any legal conclusions. Fowler, 578 F.3d at 210; Elbaum, 2013 WL 62339593, at *1. Second, a court is required to determine whether the facts alleged in the complaint “are sufficient to show that the plaintiff has a ‘plausible claim for relief.’” Fowler, 578 F.3d at 210 (quoting Iqbal, 129 S. Ct. at 1950). Consequently, to meet the Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 8 of 19 -9- SL1 1458949v1 104945.00796 pleading requirements of Rule 8(a)(2) a complaint “must do more than allege the plaintiff’s entitlement to relief[,] [a] [c]omplaint has to ‘show’ such an entitlement with its facts.” Id. (citing Phillips, 515 F.3d at 234-35) (emphasis added). This two-part analysis is “‘context-specific,’” requiring a court to “draw on ‘its judicial experience and common sense’ to determine if the facts pled in the complaint have ‘nudged [plaintiff’s] claims’ over the line from ‘[merely conceivable [or possible] to plausible.’” Pierce, 555 F. Supp.2d at 501 (quoting Iqbal 129 S. Ct. at 1950-51) (alterations in original). Further, when faced with a motion to dismiss for failure to state a claim, a court may consider not only the allegations in the complaint and exhibits attached thereto but matters of public record as well as documents that are integral to or are explicitly relied upon in the complaint as the basis of a claim. See Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004) (noting that courts may consider “exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim”); Southern Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Group, Ltd., 181 F.3d 410, 426 (3d Cir. 1999) (stating “[t]o resolve a 12(b)(6) motion, a court may properly look at public records, including judicial proceedings, in addition to the allegations in the complaint”); Brown v. Hannah, 850 F. Supp.2d 471, 475 (M.D. Pa. 2012). “A document forms the basis of a claim if it is ‘integral to or explicitly relied upon in the complaint.’” Gross v. Stryker, 858 F. Supp.2d 466, 477 (W.D. Pa. 2012) (quoting In re Rockefeller Ctr. Props., Inc. Secs. Litig., 184 F.3d 280, 287 (3d Cir. 1999)). A district court may also consider an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss, if a plaintiff’s claims are based on the document. See Pension Benefit Guar. Corp. v. White Consol. Indus. Inc., 998 F.2d 1192, 1196 (3d Cir. 1993); Klock v. Live Nation Entm’t, Inc., Civ. A. No. 1:11-CV-1468, 2012 WL 315049, at *2 Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 9 of 19 -10- SL1 1458949v1 104945.00796 (M.D. Pa. Feb. 2, 2012). Additionally, a court may consider “‘documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading.’” Klock, 2012 WL 315049, at *2 (quoting Pryor v. National Collegiate Athletic Ass’n, 288 F.3d 548, 560 (3d Cir. 2002)); see also U.S. Express Lines, Ltd. v. Higgens, 281 F.3d 383, 388 (3d Cir. 2002) (stating that “[a]lthough a district court may not consider matters extraneous to the pleadings, a document integral to or explicitly relied upon in the complaint may be considered without converting the motion to dismiss into one for summary judgment”). This rule prevents a “plaintiff with a legally deficient claim that is based on a particular document” from avoiding dismissal of that claim “by failing to attach the relied upon document.” Lum, 361 F.3d at 222 n.3 (citing Pension Benefit Guar. Corp., 998 F.2d at 1196). Considering such documents is “not unfair to a plaintiff because, by relying on the document, the plaintiff is on notice that the document will be considered.” Lum, 361 F.3d at 222 n.3 (citing In re Burlington Coat Factory Secs. Litig., 114 F.3d 1140, 1426 (3d Cir. 1997)). IV. ARGUMENT A. Plaintiff’s Amended Complaint Should Be Dismissed Because She Has Failed to Aver Sufficient Facts to Support a Plausible Claim of Discrimination Ms. Russick’s Amended Complaint should be dismissed because she has failed to plead sufficient facts to support a plausible claim of discrimination against Wells Fargo under the ECOA or the FHA. Under the heightened pleading standard or Iqbal and Twombly, Ms. Russick was required to allege sufficient facts to show that her discrimination claims are plausible. See Fowler, 578 F.3d at 210 (providing that a complaint must “set out ‘sufficient factual matter’ to show that the claim is facially plausible”) (quoting Iqbal, 129 S. Ct. at 1949-50). The Amended Complaint falls far short of this standard. In the Amended Complaint, Ms. Russick fails to allege that in connection with the assumption application Wells Fargo inquired as to Ms. Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 10 of 19 -11- SL1 1458949v1 104945.00796 Russick’s age, sex or marital status or as to Mr. Gay’s disability or Mr. Orloski’s age or that Wells Fargo was aware of any of these facts. [Amended Complaint, generally]. Additionally, the Amended Complaint is devoid of any allegation that Wells Fargo communicated to Ms. Russick that her application would have been approved but for her age, sex, marital status or the disability of Mr. Gay or Mr. Orloski’s age. [See id.]. Instead, in the Amended Complaint Ms. Russick attempts to state a claim against Wells Fargo based simply upon the conclusory averment that because she allegedly provided a strong co-signor in Mr. Orloski the fact that Wells Fargo denied her application must mean she was discriminated against on the basis of age, sex, marital status and disability. Under the heightened pleading standards of Iqbal and Twombly, not only is this Court not required to accept such a conclusory legal averments as true in ruling on this Motion, but such averments are insufficient to state a plausible claim under either the ECOA or the FHA. Accordingly, because the Amended Complaint fails to aver sufficient facts to establish a claim for discrimination under the ECOA or the FHA, the Amended Complaint should be dismissed in its entirety. B. Plaintiff Has Failed to State an ECOA Claim Because Disability is Not a Protected Class Under the ECOA and She Lacks Standing to Assert Such a Claim; She Has Not Alleged and Cannot Establish that She Was Qualified for the Assumption or that Wells Fargo Treated Younger, Non-Divorced, Non- Disabled Males More Favorably. Ms. Russick’s ECOA claim should be dismissed because she has failed to plead, and cannot establish, such a claim where: (a) disability is not a protected class under the ECOA and she lacks standing to assert such a claim based upon the alleged disability of Mr. Gay; and (b) Ms. Russick has again failed to allege that she was qualified for the assumption of the Loan or that Wells Fargo treated younger, non-divorced, non-disabled males more favorably. Section 1691 of the ECOA provides, in pertinent part, that “[i]t shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction-- Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 11 of 19 -12- SL1 1458949v1 104945.00796 (1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract).” 15 U.S.C. § 1691(a). Disability is not a protected class under Section 1691(a). See id. An applicant is defined as “any person who applies to a creditor for an extension, renewal, or continuation of credit, or applies to a creditor indirectly by use of an existing credit plan for an amount exceeding a previously established credit limit.” 15 U.S.C. 1691a(b). Significantly, the term “applicant” does not include co-applicants or those with whom an applicant is associated. See id. To state a prima facie claim for discrimination under the ECOA, a plaintiff must plead that: “(1) he belongs to a protected class; (2) he applied for credit; (3) he was qualified for credit; and (4) credit was nevertheless denied.” Pettino v. GE Money Bank, Civ. A. No. 10- 2569, 2011 WL 1163308, at *3 (E.D. Pa. March 30, 2011) (citing Anderson v. Wachovia Mortgage Corp., 621 F.3d 261, 268 n.5 (3d Cir. 2010)). In addition, the Third Circuit has stated that to establish a prima facie claim under the ECOA a plaintiff must establish “that others not in the[] protected class were treated more favorably.” Visconti v. Veneman, 204 Fed. App’x. 150, 154 (3d Cir. 2006); see also Wingert v. Credit Based Asset Servicing & Securitization, LLC, Civ. A. No. 02-1973, 2004 WL 2915306, at *9 n.14 (W.D. Pa. Aug. 26, 2004) (stating same); Guisewhite v. Muncy Bank & Trust Co., Civ. A. No. 4:CV-95-1432, 1996 WL 511525, at *4 (M.D. Pa. March 25, 1996) (stating same); 12 C.F.R. § 1002.2(n) (defining “discriminate against an applicant” as treating “an applicant less favorably than other applicants”). Here, Ms. Russick contends that in denying her and Mr. Gay’s assumption application Wells Fargo discriminated against her on the basis of age, sex, her marital status and the disability of Mr. Gay in violation of the ECOA. [Amended Complaint, ¶ 39]. Ms. Russick Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 12 of 19 -13- SL1 1458949v1 104945.00796 cannot establish a claim for discrimination based upon Mr. Gay’s alleged disability because disability is not a protected class under the ECOA. See 15 U.S.C. § 1691(a). Moreover, Ms. Russick lacks standing to assert a claim of discrimination based upon Mr. Gay’s alleged disability because an applicant under the ECOA does not include co-applicants or those associated with the applicant and she does not allege that she is disabled. See 15 U.S.C. § 15 U.S.C. § 1691a(b). Accordingly, Ms. Russick cannot establish an ECOA claim against Wells Fargo based upon disability. Similarly Ms. Russick cannot establish a claim against Wells Fargo for discrimination based upon age, sex or marital status under the ECOA where she has again failed to allege that she was qualified for the assumption. Rather than curing this deficiency in her Complaint, in the Amended Complaint Ms. Russick admits that she was not qualified for the assumption. [Amended Complaint, ¶ 23 (averring that she was advised that she needed a “co-signor with assets and a high credit rating to co-sign on the mortgage”); Pettino, 2011 WL 1163308, at *3. Additionally, the Amended Complaint is devoid of any allegation that Wells Fargo treated others not in the protected class, i.e., younger, non-divorced, non-disabled males more favorably. [Amended Complaint, generally]; Visconti, 204 Fed. App’x. at 154. In addition, Ms. Russick fails to explain how Wells Fargo could have discriminated against her on the basis of sex where she contends that she would have replaced another female borrower on the Mortgage, Ms. Gay, had the assumption application been approved. [Amended Complaint, generally]. Moreover, Ms. Russick’s conclusory allegations that: (a) Wells Fargo was “not prepared to substitute two elderly borrowers3” for a younger one even though Mr. Orloski allegedly was a 3 The term “elderly” is defined under the ECOA as a person “age 62 or older.” 12 C.F.R. 1002.2(o). Accordingly, to the extent that Ms. Russick contends that she was discriminated against due to “elderly” status, she has failed to state a claim for which relief may be granted. Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 13 of 19 -14- SL1 1458949v1 104945.00796 more “credit worthy borrower” and (b) Wells Fargo’s denial of Ms. Russick and Mr. Gay’s application “was motivated solely by discrimination” do not support an inference of discrimination sufficient to plead a prima facie claim of discrimination and withstand a motion to dismiss where Ms. Russick has failed to even aver that she was qualified for the assumption. [Amended Complaint, ¶¶ 32, 38]. In 16330 Southfield Ltd. P’ship v. Flagstar Bank, F.S.B., 727 F.3d 502, 505 (6th Cir. 2013), the Sixth Circuit affirmed the trial court’s dismissal of an ECOA claim where the plaintiff failed to aver facts giving rise to a plausible inference of discrimination sufficient to state a prima facie claim. Finding the allegations in the complaint insufficient to withstand dismissal under Rule 12(b)(6), the Sixth Circuit explained: The factual matter in the complaint does not support an inference of discrimination. Danou’s Iraqi origin does not itself establish the requisite inference. . . . Banks often refuse to provide secured loans, just as they often refuse to provide unsecured ones. . . . To be sure, the mere existence of more likely alternative explanations does not automatically entitle a defendant to dismissal. . . . But you can’t assess the plausibility of an inference in a vacuum. The reasonableness of one explanation for an incident depends, in part, on the strength of the competing explanations. . . . Where, as here, the complaint alleges facts that are merely consistent with liability (i.e., being Iraqi and being denied a loan extension) as opposed to facts that demonstrate discriminatory intent (i.e. disparate impact or direct evidence), the existence of obvious alternative explanations simply illustrates the unreasonableness of the inference sought and the implausibility of the claims made. The plaintiffs respond by pointing to the complaint’s statements that Flagstar has treated comparable non-Iraqi applicants more favorably. See R. 7 ¶ 35 (alleging “upon information and belief” that Flagstar refinanced delinquent borrowers who “were Caucasian” or “not member of minority groups”) . . . . These are precisely the kind of conclusory allegations that Iqbal and Twombly condemned and thus told us to ignore when evaluating a complaint’s sufficiency. No doubt disparate treatment of similarly situated people may support an inference of discrimination. . . . But the plaintiffs have not identified any similarly situated individuals who Flagstar treated better. They have merely alleged their “belief” that such people exist. These “naked assertions devoid of further factual Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 14 of 19 -15- SL1 1458949v1 104945.00796 enhancement” contribute nothing to the sufficiency of the complaint. . . . At the bottom, as between the “obvious alternative explanation for the [denial] and the purposeful, invidious discrimination [the plaintiffs] ask[] us to infer, discrimination is not a plausible conclusion.” Id. at 505-06 (quoting Iqbal, 556 U.S. at 678, 682) (citations omitted, alternations in original, emphasis added). Here too, the allegations in the Amended Complaint do not give rise to a plausible inference of discrimination. The mere fact that Ms. Russick is a 60 year old divorced female with an allegedly disabled adult son and was denied an application to assume a mortgage by Wells Fargo does support an inference of discrimination where Ms. Russick has failed to aver that she was qualified for the assumption and the averments in the Amended Complaint evidence that she was not. [Amended Complaint, ¶ 23]. Consequently, because Ms. Russick has failed to plead the requisite elements of a claim under the ECOA, failed to plead any facts support a plausible inference of discrimination and cannot establish such a claim where she was not qualified for the loan, the Court should dismiss her ECOA claim in its entirety with prejudice. C. Plaintiff Has Failed to State a FHA Claim for Which Relief May Be Granted and Cannot Establish Such a Claim Because She Is Not Disabled, Admits that She Sought to Replace Another Female on the Mortgage and Marital Status is Not a Protected Class under the FHA. Ms. Russick’s FHA claim must be dismissed because she has failed to state and cannot establish a claim for discrimination based sex, disability or marital status under the FHA where: (a) she failed to allege what section of the FHA Wells Fargo allegedly violated; (b) she lacks standing to assert a claim of discrimination based upon Mr. Gay’s disability; (c) she admits that she sought to replace another female on the Mortgage; and (d) marital status is not a protected class under the statute. First, in the Amended Complaint Ms. Russick has again failed to state a claim under the Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 15 of 19 -16- SL1 1458949v1 104945.00796 FHA because she has not identified which section of the FHA Wells Fargo allegedly violated. [Amended Complaint, ¶¶ 42-52 and generally]. Instead, she merely alleges in a conclusory fashion that the actual or de facto denial of Ms. Russick and Mr. Gay’s assumption application “was solely motivated by age discrimination” in “violation of the Equal Credit Opportunity Act and the Fair Housing Act.” [Amended Complaint, ¶ 32]. By failing to plead which section of the FHA allegedly violated by Wells Fargo and pleading in such a conclusory fashion, the Complaint violates the pleading standards of Rule 8(a)(2) and Ms. Russick has failed to plead a claim for which relief may be granted. See Fed. R. Civ. P. 8(a)(2); Twombly, 127 S. Ct. at 1964- 65 (stating a plaintiff is obligated to “to provide the grounds of his entitlement to relief” and that mere “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do”). Notwithstanding the deficiency of the Amended Complaint, Ms. Russick’s FHA claim fails as a matter of law because marital status is not a protected class under the statute. See 42 U.S.C. §§ 3601 et seq.; Canatella v. Reverse Mortgage Solutions, Inc., Civ. A. No. 13-cv-05937- HSG, 2016 WL 6070508, at *3 (N.D. Cal. Oct. 17, 2016) (dismissing FHA claim on basis of marital status and stating: “Of the three bases of discrimination alleged by Plaintiff, two - age and marital status - fail because they are not prohibited by section 3605”). The statute prohibits discriminatory housing practices and defines that term as those practices which are unlawful under Sections 3604, 3605, 3606, or 3617. See 42 U.S.C. § 3602(f). None of those Sections, however, prohibit discrimination based upon marital status. See 42 U.S.C. § 3604(a) (prohibiting discrimination in the sale or rental of housing on the basis of “race, color, religion, sex, familial status, or national origin”); § 3605(a) (prohibiting discrimination in connection with real estate transactions on the basis of “race, color, religion, Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 16 of 19 -17- SL1 1458949v1 104945.00796 sex, handicap, familial status, or national origin”); § 3606 (prohibiting discrimination in provision of brokerage services on the basis of “race, color, religion, sex, handicap, familial status, or national origin”); § 3617 (providing that: “It shall be unlawful to coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or on account of his having exercised or enjoyed, or on account of his having aided or encouraged any other person in the exercise or enjoyment of, any right granted or protected by section 3603, 3604, 3605, or 3606 of this title.”). Moreover, while the FHA prohibits discrimination based upon “familial status”, familial status is defined as: one or more individuals (who have not attained the age of 18 years) being domiciled with - (1) a parent or another person having legal custody of such individual or individuals; or (2) the designee of such parent or other person having such custody, with the written permission of such parent or other person. The protections afforded against discrimination on the basis of familial status shall apply to any person who is pregnant or is in the process of securing legal custody of any individual who has not attained the age of 18 years. 42 U.S.C. § 3602(k) (emphasis added). As such, familial status does not include marital status and also does not include two adult individuals, like Ms. Russick and Mr. Gay, residing together. See id. In support of her FHA claim, however, Ms. Russick does not allege that Wells Fargo discriminated against her on the basis “familial status” but rather on the basis of her marital status. [Amended Complaint, ¶ 51]. Because marital status is not a protected class under the FHA and Ms. Russick has not alleged and cannot establish a FHA claim based upon her familial status, she has failed to state and cannot establish a claim for which relief may be granted. Additionally, Ms. Russick cannot establish a claim for discrimination under the FHA based upon sex where she admits that she sought to replace another female - Ms. Gay - on the Mortgage. [Amended Complaint, ¶ 20]. Moreover, as set forth above Ms. Russick has not Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 17 of 19 -18- SL1 1458949v1 104945.00796 alleged anywhere in the Amended Complaint that Wells Fargo based its decision based upon her sex, nor can she plausibly do so when she alleges that she was to replace Ms. Gay on the Mortgage. [See id.]. Finally, Ms. Russick cannot establish a claim of discrimination under the FHA based upon Mr. Gay’s alleged disability where she lacks standing to assert such a claim. “‘[T]o establish a prima facie case of discrimination [under the FHA], a plaintiff must prove: (1) that he is in a protected class; (2) that he applied and was qualified . . . ; (3) that he was rejected; and (4) housing opportunities remained available.’” Pondexter v. Allegheny County Housing Auth., Civ. A. No. 11-857, 2012 WL 3611225, at *6 (W.D. Pa. Aug. 21, 2012) (quoting Koons v. Lacey Twp., 78 F. App’x 199, 207 (3d Cir. 2003)). Ms. Russick lacks standing to state a FHA claim for discrimination based upon Mr. Gay’s alleged disability because she cannot allege that she is a member of that protected class. As such, she may not base her FHA claim upon the status of Mr. Gay and her FHA claim fails as a matter of law and should be dismissed in its entirety. Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 18 of 19 -19- SL1 1458949v1 104945.00796 V. CONCLUSION In light of the foregoing, Wells Fargo respectfully requests that this Court grant its Motion to Dismiss and that Plaintiff’s Amended Complaint be dismissed in its entirety with prejudice and without leave to amend. Respectfully submitted, STEVENS & LEE, P.C. Dated: April 7, 2017 By /s/ Christine M. Kovan Steven J. Adams, Esquire Attorney I.D. No. 56293 111 N. Sixth Street Reading, PA 19601 Tel.: (610) 478-2133 email: sja@stevenslee.com Christine M. Kovan Attorney I.D. No. 82428 620 Freedom Business Center, Suite 200 King of Prussia, PA 19406 Tel.: (610) 205-6038 Email: cmk@stevenslee.com Attorneys for Defendant Wells Fargo Home Mortgage, an unincorporated division of Wells Fargo Bank, N.A. Case 2:17-cv-00149-NBF Document 19 Filed 04/07/17 Page 19 of 19 Exhibit “1” Case 2:17-cv-00149-NBF Document 19-1 Filed 04/07/17 Page 1 of 6 Case 2:17-cv-00149-NBF Document 19-1 Filed 04/07/17 Page 2 of 6 Case 2:17-cv-00149-NBF Document 19-1 Filed 04/07/17 Page 3 of 6 Case 2:17-cv-00149-NBF Document 19-1 Filed 04/07/17 Page 4 of 6 Case 2:17-cv-00149-NBF Document 19-1 Filed 04/07/17 Page 5 of 6 Case 2:17-cv-00149-NBF Document 19-1 Filed 04/07/17 Page 6 of 6 Exhibit “2” Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 1 of 11 Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 2 of 11 Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 3 of 11 Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 4 of 11 Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 5 of 11 Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 6 of 11 Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 7 of 11 Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 8 of 11 Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 9 of 11 Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 10 of 11 Case 2:17-cv-00149-NBF Document 19-2 Filed 04/07/17 Page 11 of 11 Exhibit “3” Case 2:17-cv-00149-NBF Document 19-3 Filed 04/07/17 Page 1 of 6 Case 2:17-cv-00149-NBF Document 19-3 Filed 04/07/17 Page 2 of 6 Case 2:17-cv-00149-NBF Document 19-3 Filed 04/07/17 Page 3 of 6 Case 2:17-cv-00149-NBF Document 19-3 Filed 04/07/17 Page 4 of 6 Case 2:17-cv-00149-NBF Document 19-3 Filed 04/07/17 Page 5 of 6 Case 2:17-cv-00149-NBF Document 19-3 Filed 04/07/17 Page 6 of 6 Exhibit “4” Case 2:17-cv-00149-NBF Document 19-4 Filed 04/07/17 Page 1 of 5 Case 2:17-cv-00149-NBF Document 19-4 Filed 04/07/17 Page 2 of 5 Case 2:17-cv-00149-NBF Document 19-4 Filed 04/07/17 Page 3 of 5 Case 2:17-cv-00149-NBF Document 19-4 Filed 04/07/17 Page 4 of 5 Case 2:17-cv-00149-NBF Document 19-4 Filed 04/07/17 Page 5 of 5 Exhibit “5” Case 2:17-cv-00149-NBF Document 19-5 Filed 04/07/17 Page 1 of 6 Case 2:17-cv-00149-NBF Document 19-5 Filed 04/07/17 Page 2 of 6 Case 2:17-cv-00149-NBF Document 19-5 Filed 04/07/17 Page 3 of 6 Case 2:17-cv-00149-NBF Document 19-5 Filed 04/07/17 Page 4 of 6 Case 2:17-cv-00149-NBF Document 19-5 Filed 04/07/17 Page 5 of 6 Case 2:17-cv-00149-NBF Document 19-5 Filed 04/07/17 Page 6 of 6 Exhibit “6” Case 2:17-cv-00149-NBF Document 19-6 Filed 04/07/17 Page 1 of 3 Case 2:17-cv-00149-NBF Document 19-6 Filed 04/07/17 Page 2 of 3 Case 2:17-cv-00149-NBF Document 19-6 Filed 04/07/17 Page 3 of 3 SL1 1458949v1 104945.00796 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA ROSANNE RUSSICK, Plaintiff vs. WELLS FARGO, INC. D/B/A WELLS FARGO HOME MORTGAGE, Defendant : : : : : : : : : : : : : Case No. 2:17-cv-00149-NBF [Electronically Filed] CERTIFICATE OF SERVICE I, Christine M. Kovan, hereby certify that Wells Fargo’s Motion to Dismiss Plaintiff’s Amended Complaint Pursuant to Fed. R. Civ. P. 12(b)(6), the Memorandum of Law in Support thereof and proposed order have been filed electronically and are available for viewing and downloading from the ECF System. Dated: April 7, 2017 /s/ Christine M. Kovan Christine M. Kovan Case 2:17-cv-00149-NBF Document 19-7 Filed 04/07/17 Page 1 of 1