Smith v. Ditech Financial Llc

REPLY BRIEF re MOTION to Dismiss Plaintiff's Complaint

M.D. Pa.September 12, 2016

139508.00804/103381305v.1 UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA GUY SMITH, Plaintiff, v. DITECH FINANCIAL LLC, Defendant. CIVIL ACTION NO.: 3:16-cv-01210-MEM ORDER After due consideration of the Motion to Dismiss Plaintiff’s Complaint filed by Defendant, Ditech Financial LLC, Plaintiff’s Opposition, and Defendant’s Reply thereto, and for good cause shown: IT IS ON THIS ____ DAY OF ______________ 2016, ORDERED that the Motion to Dismiss is hereby GRANTED and Plaintiff’s Complaint is DISMISSED, WITH PREJUDICE. BY THE COURT: _____________________________ Hon. Malachy E. Mannion, U.S.D.J. Case 3:16-cv-01210-MEM Document 9 Filed 09/12/16 Page 1 of 7 1 139508.00804/103381305v.1 UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA GUY SMITH, Plaintiff, v. DITECH FINANCIAL LLC, Defendant. CIVIL ACTION NO.: 3:16-cv-01210-MEM DEFENDANT’S REPLY BRIEF IN SUPPORT OF MOTION TO DISMISS PLAINTIFF’S COMPLAINT Defendant Ditech Financial LLC (“Ditech”), by its undersigned counsel, hereby submits this Reply Brief (“Reply”) in Support of its Motion to Dismiss Plaintiff’s Complaint (the “Motion”) and in response to the Opposition to its Motion (the “Opposition”) filed by pro se Plaintiff, Guy Smith (“Smith” or “Plaintiff”). Specifically, this Reply is intended to briefly address the new allegations improperly asserted in Plaintiff’s Opposition for the first time. These allegations, as with those contained in Plaintiff’s Complaint, fail to state a claim against Defendant. Accordingly, for the reasons stated below and in Defendant’s Motion, Plaintiff’s Complaint should be dismissed with prejudice. I. The New Allegations Raised by the Plaintiff for the First Time in His Opposition Are Procedurally Improper and Should Be Disregarded. After failing to timely respond to Defendant’s Motion to Dismiss within the requisite fourteen (14) days as required by Local Rule 7.6, and after the Honorable Martin C. Carlson recommended dismissal of Plaintiff’s Complaint because of its “dubious merit” and his failure to respond to and obey prior court orders, Plaintiff belatedly filed his Opposition on August 29, 2016. See Docket #7, August 17, 2016 Report and Recommendation of Magistrate Judge Martin C. Carlson. The Opposition, however, predominately recycles the same meritless arguments Case 3:16-cv-01210-MEM Document 9 Filed 09/12/16 Page 2 of 7 2 139508.00804/103381305v.1 found in his original Complaint. These include unsupported allegations that Defendant lacks standing to foreclosure on his mortgage loan and has violated the Federal Debt Collection Practices Act (the “FDCPA”), the Fair Credit Reporting Act (the “FCRA”), Pennsylvania’s Unfair Trade Practice and Consumer Protection Law (“UTPCPL”), and other statutes. As addressed more fully in Defendant’s Motion to Dismiss, Plaintiff’s Complaint fails to sufficiently allege any viable claims against the Defendant and, should be dismissed. In what appears to be an attempt to rehabilitate his deficient Complaint, Plaintiff’s Opposition – for the first time – alleges that Defendant violated “rules issued by the Consumer Financial Protection Bureau (“CFPB”) as well as various state laws and by the National Mortgage Settlement (NMS),” and purported requirements of lenders and loan servicers under Fannie Mae’s Home Affordable Modification Program. See Opposition, at ¶¶9-20. Indeed, Plaintiff seems to be throwing in every potential allegation he can find in what appears to be a “cut and paste” job from some unrelated legal brief that he discovered.1 Such new allegations, however, are improperly raised in Plaintiff’s Opposition and should be disregarded. To the extent that Plaintiff is attempting to amend his Complaint to set forth new claims that have not been alleged in his initial pleading, such an attempt is procedurally improper and must be denied. See Federico v. Home Depot, 507 F.3d 188, 201-202 (3d Cir. 2007). In Federico, the Third Circuit Court of Appeals affirmed a District Court’s dismissal of a complaint where the plaintiff raised factual allegations in her brief in opposition to a motion to dismiss that were not present in the complaint. Id. In refusing to consider any such 1 As evidence of this, Paragraph 4 of Plaintiff’s Opposition refers to “Respondent SERETUS,” a wholly separate loan servicing company that has no relation to the Defendant or this case in any way. It is rather obvious that Seretus, Inc. was a party in the form brief that Plaintiff has borrowed from for his Opposition. It is also telling that Plaintiff uses the terms “Petitioner” and “Respondent” inconsistently within his Opposition and also in comparison to his Complaint (where he refers to the parties as “Plaintiff” and “Defendant”). This further suggests a different origin for his brief. Case 3:16-cv-01210-MEM Document 9 Filed 09/12/16 Page 3 of 7 3 139508.00804/103381305v.1 allegations, the Court stated that it would “not consider after-the-fact allegations in determining the sufficiency of [the] complaint under Rules 9(b) and 12(b)(6).” Id. (citing Commw. of Pa. ex. rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir. 1988) (“It is axiomatic that the complaint may not be amended by the briefs in opposition to a motion to dismiss.”). Similarly, this Court should not consider the claims and allegations that Plaintiff raises for the first time in his Opposition. If Plaintiff wishes to allege new factual allegations or bring new claims, the proper method would be to seek leave to amend his Complaint. Based on the fact that these allegations are unsupported and, ultimately, have no merit, however, such an amendment would be futile. Accordingly, Plaintiff’s Complaint should be dismissed. II. The New Allegations Contained in Plaintiff’s Opposition Fail to State a Claim Upon Which Relief May be Granted. Even if the Court could reach the new allegations contained in the Opposition, dismissal of Plaintiff’s claims remains the only appropriate outcome since – as in his original Complaint – Plaintiff has failed to state a claim as required by Rule 12(b)(6). To state a valid cause of action, a plaintiff must provide factual grounds for relief, which “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). The Supreme Court subsequently refined these pleading requirements, stating that the facts pled must amount to more than “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009). The Supreme Court’s ruling in Iqbal emphasizes that a plaintiff must set out “sufficient factual matter” to show that the allegations of his or his complaint are plausible. Id., at 1949-50. Plaintiff’s Opposition neither bolsters the factual support of the claims plead in his Complaint, nor provides a factual bases for his new allegations. Rather, Plaintiff spends a full Case 3:16-cv-01210-MEM Document 9 Filed 09/12/16 Page 4 of 7 4 139508.00804/103381305v.1 eight (8) pages of his Opposition with nothing more than “threadbare recitals” of regulations and statues with no factual support whatsoever. See Opposition, at ¶¶9-20. This is precisely what Twombly condemned. For example, he spends four pages reciting a summary of purported CFPB rules (with no specific citations) related to, inter alia, “restricted dual tracking,” a “fair review process,” “no-runaround,” and “options for avoiding costly ‘force-placed’ insurance,” with no specific facts on how or when Defendant allegedly violated these alleged rules. Id. at ¶¶10-11. Similarly, he spends another four (4) pages noting purported HAMP instructions for lenders and loan servicers but, again, fails to allege how this gives rise to a cause of action or how Defendant allegedly violated these requirements. Id. at ¶¶12-20. Indeed, other than the caption and his signature line, there is not a single paragraph in Plaintiff’s Opposition that is specific enough to identify this document as relating to this particular Plaintiff, this Defendant, or the facts of this particular case. Ultimately, the only “factual” allegations included in the Opposition are a few, general statements that Defendant “did not negotiate in good faith” when complying with HAMP, that it “engaged in unfair and deceptive conduct” while processing the loan modification application, and that it engaged in other general acts such as “intentionally overcharging” the Plaintiff and “dual-tracking. Id. at ¶¶ 21, 27. No additional facts are pled to support these claims. Without more, cannot be maintained. III. Allowing Plaintiff To Amend His Complaint Would Be Futile. As stated above, Plaintiff’s allegations, both in his original Complaint and his Opposition, fail to state viable claims against Defendant. Even if he could amend his pleading sufficiently to survive a Motion to Dismiss, his arguments are nothing more than purported defenses to the foreclosure of his Property. Accordingly, these arguments are more appropriately raised and addressed in the foreclosure action recently filed by the Defendant in Monroe County Case 3:16-cv-01210-MEM Document 9 Filed 09/12/16 Page 5 of 7 5 139508.00804/103381305v.1 Court of Common Pleas. Permitting the Plaintiff to amend his Complaint here would be futile and a waste of the Court’s resources since these same arguments will undoubtedly be litigated and dispensed with in the foreclosure action. Further, while Plaintiff will suffer no prejudice (since he could still pursue his claims in the foreclosure action), Defendant would be forced to bear the additional expense and delay of potentially defending against these claims in two separate courts. For these reasons, Plaintiff should not be permitted to amend his Complaint. IV. CONCLUSION As stated in Defendant’s Motion, Plaintiff’s Complaint consists of nothing more than unsupported contested foreclosure arguments repackaged as statutory and common law claims. After defaulting on his loan and receiving a notice of default and intent to foreclose, Plaintiff “pre-emptively” filed his Complaint in Monroe County, Pennsylvania before Defendant initiated its foreclosure action. The arguments contained in his Opposition either repeat the same meritless arguments contained in his Complaint, or improperly introduce new ones that are equally unsupported. For the above reasons, and those contained in its Motion to Dismiss, Defendant respectfully requests that this Court grant the instant Motion and dismiss Plaintiff’s Complaint with prejudice. Respectfully submitted, /s/ Kyle Vellutato Kyle Vellutato, Esq. Blank Rome LLC One Logan Square 130 North 18th Street Philadelphia, Pennsylvania 19103 (215) 569-5500 Attorneys for Defendant, Ditech Financial LLC Dated: September 12, 2016 Case 3:16-cv-01210-MEM Document 9 Filed 09/12/16 Page 6 of 7 6 139508.00804/103381305v.1 UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA GUY SMITH, Plaintiff, v. DITECH FINANCIAL LLC, Defendant. CIVIL ACTION NO.: 3:16-cv-01210-MEM CERTIFICATION OF SERVICE I hereby certify that on September 12, 2016, I caused true and correct copies of the foregoing Reply Brief in Support of Defendant’s Motion to Dismiss to be served, via FedEx Overnight Delivery, Regular U.S. Mail, and Certified Mail, Return Receipt Requested, upon the following: Mr. Guy Smith 10 Thomas Point East Stroudsburg, Pennsylvania 18301-1344 Pro Se Plaintiff BLANK ROME LLP Kyle Vellutato, Esq. Dated: September 12, 2016 Kyle Vellutato, Esq. Case 3:16-cv-01210-MEM Document 9 Filed 09/12/16 Page 7 of 7