Bell v. Deutsche Bank

MAMIE H. BELL, NAYQUAN A. BELL, Plaintiffs, v. DEUTSCHE BANK, INDYMAC 2006-AR27, RAS BORISKIN, LLC, Defendants.

18-CV-01593 (JMA) (GRB)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

September 30, 2019

For Online Publication Only

MEMORANDUM AND ORDER

APPEARANCES:

Mamie Bell, Nayquan Bell

Pro se Plaintiffs

Ashley R. Newman

McGlinchey Stafford

112 West 34th Street, Suite 1515

New York, New York 10120

Attorney for Defendant Deutsche Bank

National Trust, as Trustee for Indymac 2006-AR27

AZRACK, United States District Judge:

On February 2, 2018, Mamie Bell and Nayquan Bell (together "plaintiffs" or the "Bells") filed a pro se complaint in the Supreme Court of New York, Nassau County against Deutsche Bank as Trustee for Indymac 2006-AR27 ("Deutsche Bank" or the "defendant") and RAS Boriskin, LLC ("RAS Boriskin" or the "law firm") (together, the "defendants"). On March 14, 2018, Deutsche Bank removed the case to this Court pursuant to § 28 U.S.C. 1441(a) and (b) based upon 28 U.S.C. §§ 1331 and 1332(a). (Def.'s Notice of Removal ("Removal Not."), ECF No. 1.) Before the Court is Deutsche Bank's motion to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(5) and 12(b)(6). (Def.'s Mot. to Dismiss, ECF No. 10.) For the reasons stated below, the Court grants defendant's motion and dismisses plaintiffs' complaint in its entirety. However, plaintiffs are granted leave to file an amended complaint consistent with this Memorandum and Order within thirty (30) days.

I. BACKGROUND

The following facts are taken from plaintiffs' complaint, the record before the Court and filings from the related foreclosure action. In deciding a motion to dismiss, the Court may take judicial notice of public records, including state court filings. Blue Tree Hotels Inv. (Canada), Ltd. v. Starwood Hotels & Resorts Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004). The Court can also consider exhibits—such as copies of the mortgage and mortgage assignments—which are attached or integral to the complaint. Sira v. Morton, 380 F.3d 57, 67 (2d Cir. 2004).

A. The Mortgage

On August 2, 2006, plaintiffs executed a mortgage (the "Mortgage") in favor of Mortgage Electronic Registration Systems, Inc. ("MERS") as mortgagee, and a note (the "Note") in favor of Indymac Bank, F.S.B. (the lender) in the principal sum of $352,000 concerning a property located at 105 Montague Street, Valley Stream, New York (the "Property"). (Declaration of Ashley R. Newman ("Newman Decl.") Ex. B, ECF No. 10-4.) The Mortgage was recorded on August 10, 2006. (Id.) On October 14, 2009, the Mortgage was assigned to OneWest, F.S.B. ("OneWest") (Id. Ex. C, ECF No. 10-5.) On December 1, 2010, the Mortgage was assigned to Deutsche Bank. (Id. Ex. D, ECF No. 10-6.) This assignment was recorded in the Nassau County Clerk's Office on June 22, 2011. (Id.).

B. The Foreclosure Proceeding

As a result of plaintiffs' default on the Note and Mortgage by failing to make their monthly payment, on September 8, 2015, Deutsche Bank commenced an action against plaintiffs in New York State Supreme Court, Nassau County.¹ (Id. Ex. E, ECF No. 10-7.) Plaintiffs filed an answer on October 15, 2015 which contained no affirmative defenses. (Id. Ex. F, ECF No. 10-8.) On October 3, 2016, the state court granted Deutsche Bank's motion for summary judgment, issued a default judgment against the Bells, and appointed a referee to ascertain the amount due on the Mortgage. (Id. Ex. G, ECF No. 10-9.) Deutsche Bank obtained a judgment of foreclosure and sale on December 22, 2017. (Id. Ex. H, ECF No. 10-10.) The Property was scheduled to be sold on March 20, 2018, however, on that date plaintiffs filed an order to show cause seeking a temporary restraining order to stay the sale. (Id. Ex. I, ECF No. 10-11.) In support of their request, plaintiffs alleged that Deutsche Bank engaged in violations of federal consumer protection laws, misrepresentation, predatory mortgage servicing, and predatory lending. (Id.) Plaintiffs also attached a copy of the instant complaint to their Order to Show Cause. (Id.) On April 27, 2018, the state court denied plaintiffs' order to show cause and directed Deutsche Bank to proceed with the foreclosure. (Id. Ex. J, ECF No. 10-12.) A foreclosure sale was scheduled for July 31, 2018. (Newman Decl. ¶ 12.) On March 7, 2019, plaintiffs filed a motion in the foreclosure action seeking an order directing production of the Note, reversal of the deed, and cancelation of the auction sale that occurred on July 30, 2018. (Def.'s Supplemental Reply, ECF No. 14.) On April 4, 2019, the state court denied plaintiffs' motion. (Id.)

C. The Instant Action

On January 18, 2018, plaintiffs filed the instant complaint against the defendants in the Supreme Court of New York, Nassau County. (Compl.) Construing plaintiffs' complaint liberally, it appears to allege that Deutsche Bank engaged in predatory lending and predatory mortgage servicing in violation of unspecified provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") and the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et., seq. (Id. ¶¶ 4-5.) The complaint also appears to allege state law claims against Deutsche Bank for breach of contract, deceptive business practices (seemingly pursuant to New York General Business Law ("GBL") § 349), and negligent infliction of emotional distress.² (Id. ¶¶ 5-7.) As to defendant RAS Boriskin, plaintiffs appear to allege a state law claim of negligent infliction of emotional distress.³ (Id. ¶ 6.) Plaintiffs seek $70 million dollars in damages, including damages for emotional distress and punitive damages. (Id. ¶¶ 6, 8.)

On March 14, 2018, Deutsche Bank removed this action pursuant to 28 U.S.C. § 1441(a) and (b) asserting that this Court has both federal question and diversity of citizenship jurisdiction. (See Removal Not. ¶¶ 6, 7) (citing 28 U.S.C. §§ 1331 and 1332(a).) Deutsche Bank's notice of removal claims that plaintiffs fraudulently joined RAS Boriskin, "who [has] no real connection to this action" in an effort to defeat diversity jurisdiction. (Removal Not. ¶ 8(a).) Plaintiffs did not seek remand or otherwise challenge the removal, or address Deutsche Bank's claim that RAS Boriskin was fraudulently joined.

Deutsche Bank filed the instant motion to dismiss on September 11, 2018, pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)"), claiming that plaintiffs' complaint should be dismissed because their claims are barred by the doctrine of res judicata and fail to state a claim upon which relief can be granted. (Def.'s Mem., ECF No. 10-1 at 3-11.) Defendant further asserts that plaintiffs' claims should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(5) ("Rule 12(b)(5)") as it has not been formally served with the summons and complaint. (Id. at 11-12.) Plaintiffs filed an opposition to defendant's motion, (Pl.'s Opp. to Mot. to Dismiss, ECF No. 11), and defendant replied. (Def.'s Reply Mem., ECF No. 12.) On March 22, 2019, plaintiffs filed a supplemental letter opposing defendant's motion, (Suppl. Opp. to Def's Mot. to Dismiss, ECF No. 13), and defendant responded on June 19, 2019. (Def.'s Suppl. Reply.) RAS Boriskin has not appeared in this action.

II. DISCUSSION

A. Standards of Review

1. Motion to Dismiss for Insufficient Process

Rule 12(b)(5) permits a party to move to dismiss the complaint for insufficient service of process. Fed. R. Civ. P. 12(b)(5). To resolve a motion to dismiss for insufficiency of process, the court "must look to matters outside the complaint to determine what steps, if any, the plaintiff took to effect service." C3 Media & Marketing Group, LLC v. Firstgate Internet, Inc., 419 F. Supp. 2d 419, 427 (S.D.N.Y. 2005) (internal quotations and citation omitted); see also Cassano v. Altshuler, 186 F. Supp. 3d 318, 320 (S.D.N.Y. 2016). In doing so, the court considers whether the plaintiff has complied with Rule 4, which governs the content, issuance, and service of a summons. DeLuca v. AccessIT Grp., Inc., 695 F. Supp. 2d 54, 64 (S.D.N.Y. 2010). Moreover, "[o]n a Rule 12(b)(5) motion to dismiss, the plaintiff bears the burden of establishing that service was sufficient." Khan v. Khan, 360 Fed. App'x. 202, 203 (2d Cir. 2010) (citing Burda Media, Inc. v. Viertel, 417 F.3d 292, 298 (2d Cir. 2005)). "Conclusory statements that a defendant was properly served are insufficient to overcome a defendant's sworn affidavit that he was never served with process." Mende v. Milestone Tech., Inc., 269 F. Supp. 2d 246, 251 (S.D.N.Y. 2003) (internal quotations omitted).

2. Motion to Dismiss for Failure to State a Claim

To survive a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff must allege sufficient facts "to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible only "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). Mere labels and legal conclusions will not suffice. Twombly, 550 U.S. at 555. In reviewing a motion to dismiss, the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006). Motions to dismiss invoking res judicata are properly brought under Rule 12(b)(6). See Wiercinski v. Mangia 57, Inc., No. 09-CV-4413, 2010 WL 2681168, at *1 (E.D.N.Y. July 2, 2010).

The court is mindful that when considering a motion to dismiss a pro se complaint, the court must construe the complaint liberally and interpret the complaint "to raise the strongest arguments they suggest." Triestman v. Federal Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006). "However, mere conclusions of law or...