Carpenter v. U.S. Bank, N.A. (In re Carpenter)

IN RE: MARY V. CARPENTER, Debtor MARY V. CARPENTER, Plaintiff v. US BANK, N.A. and FIVE BROTHERS MORTGAGE COMPANY SERVICES AND SECURING, INC. and SAFEGUARD PROPERTIES, LLC Defendant

Case No. 11-20896-TPA

Adv. No. 11-2252-TPA

Related to Doc. No. 78

UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Dated: May 7, 2013

Chapter 13

Appearances:

Gary W. Short, Esq., for the Plaintiff, Mary V. Carpenter

Scott M. Hare, Esq., for the Defendant, U.S. Bank, N.A.

George A. Miller, Esq., for the Defendant, Five Brothers Mortgage Company

Services and Securing, Inc.

Joseph J. Santoro, Esq., for the Defendant, Safeguard Properties, LLC

MEMORANDUM OPINION

Before the Court for decision is the Motion to Dismiss ("Motion") the Second Amended Complaint ¹ ("SAC") filed by Defendant Safeguard Properties, LLC ("Safeguard") at Doc. No. 78. The Motion argues that all of the eight counts in the SAC naming Safeguard as a defendantshould be dismissed pursuant to Fed.R.Civ.P. 12(b)(1) (lack of subject matter jurisdiction) and/or Fed.R.Civ.P. 12(b)(6) (failure to state a claim upon which relief may be granted).² The Motion has been fully briefed and argued. For the reasons set forth below, the Motion will be granted in part, and Counts II and VI of the SAC will be dismissed as against Safeguard. Count VIII of the SAC will also be dismissed as against Safeguard, but the effect of that dismissal will be delayed for 30 days to give the Debtor a chance to rectify its deficiencies. The Motion will be denied in all other respects, and Safeguard will be directed to file its answer.

APPLICABLE STANDARD

A motion to dismiss under Rule 12(b)(1) challenges the court's subject matter jurisdiction:

"At issue in a Rule 12(b)(1) motion is the court's 'very power to hear the case.' " Petruska v. Gannon University, 462 F.3d 294, 302 (3d Cir.2006) (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.1977)). When jurisdiction is challenged under Rule 12(b)(1), the plaintiff bears the burden of proving that the court has jurisdiction. See Hedges v. United States, 404 F.3d 744, 750 (3d Cir.2005) (citing Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir.1991)). If the court concludes that it does not have subject matter jurisdiction over the case, it must dismiss the action. Fed.R.Civ.P. 12(h) (3).

Beeman v. United States, 2013 WL 1314467 *1 (W.D. Pa. March 28, 2013)

The standard to be applied in deciding a motion to dismiss under Rule 12(b)(6) is more complex. The late Chief Judge Lancaster of the District Court recently explained the approach to be followed:

In considering a Rule 12(b)(6) motion, we must be mindful that federal courts require notice pleading, as opposed to the heightened standard of fact pleading. Federal Rule of Civil Procedure 8(a)(2) requires only " '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 on which it rests.' " Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

To survive a motion to dismiss, a complaint must contain sufficient facts that, if accepted as true, state "a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility when a plaintiff pleads facts that allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Iqbal, 556 U.S. at 678. However, the court is " 'not bound to accept as true a legal conclusion couched as a factual allegation.' " Id. (quoting Twombly, 550 U.S. at 555).

Therefore, when deciding a motion to dismiss under Rule 12(b) (6), we must conduct a three-step inquiry. Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir.2010). First, we must " 'tak[e] note of the elements a plaintiff must plead to state a claim.' " Id. (quoting Iqbal, 556 U.S. at 675). Next, we must identify the allegations that "are no more than conclusions [and] are not entitled to the assumption of truth." Id.; Iqbal, 556 U .S. at 679. Finally, "where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement of relief." Id. (internal quotation omitted).

We may not dismiss a complaint merely because it appears unlikely or improbable that plaintiff can prove the facts alleged or ultimately prevail on the merits. Twombly, 550 U.S. at 563 n. 8. Instead, we must ask whether the facts alleged raise a reasonable expectation that discovery will reveal evidence of the necessary elements. Id. at 556. In the end, if, in view of the facts alleged, it can be reasonably conceived that the plaintiff could, upon a trial, establish a case that would entitle him to relief, the motion to dismiss should not be granted. Id. at 563 n. 8.

In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits attached to the complaint, matters of public record, and undisputedly authentic documents if the complainant's claims are based upon these documents. Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir.2010); Fed.R.Civ.P. 10(c) ("A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.").

Merrill v. State Farm Fire & Casualty Co., 2013 WL 588515 *2-3 (W.D. Pa. February 13, 2013).

FACTUAL ALLEGATIONS

The basic facts as alleged in the SAC, accepted as true for purposes of deciding the Motion, are not complicated. In 1989 the Debtor executed a mortgage on her residence, property located at 2607 South Braddock Avenue in Pittsburgh (hereinafter, "the Real Property" or "the Residence"). SAC at ¶6. At some point thereafter, the mortgage was assigned to Defendant U.S. Bank, N.A. ("Bank"). The Debtor fell behind on her mortgage payments in 2010 and on September 7, 2010 the Bank sent her a notice of intention to foreclose, pursuant to the requirement of 41 P.S. §403, commonly known as an Act 6 notice. SAC at ¶7. Thereafter, but before a foreclosure action was commenced, the Bank employed a process server to determine whether the Debtor was residing at the Real Property. SAC at ¶8. He reported that the Debtor was receiving mail at the Real Property, including tax bills, although the phone line had been disconnected.³ SAC Exhibit 3.

The Bank also employed Safeguard and the remaining Defendant, Five Brothers Mortgage Company Services and Securing, Inc. ("Five Brothers"), to assist with the planned foreclosure. In late December 2010, or early January 2011, while the Debtor was at work, representatives of Safeguard and Five Brothers "broke into" the Real Property and changed the locks. SAC at ¶9. All of the personal property therein, including furniture, clothing and family memorabilia which belonged to the Debtor and her two children, was removed from the Residenceand taken away in four trucks.⁴ SAC at ¶¶9, 10. In addition, a vehicle and a motorcycle were removed from the premises. SAC at ¶9. A notice was left on the back door with Five Brothers' name and a telephone number to call. Id. At approximately 8:30 P.M. that same day, the Debtor arrived at the Residence and discovered that she was locked out. SAC at ¶11. She called the Five Brothers telephone number but got a recording. Id. Being locked out of the Residence, she spent the night at her sister's home. Id.

The next day, the Debtor had several telephone conversations with Five Brothers and the Bank. She was told there had been a mistake and was given an "access code" for the lock box that had been placed on the door, and she was thus able to get into the Residence at that point. SAC at ¶13. The Debtor was also told that she should make a list of the missing personal property and it would be returned. Id. The Bank filed a foreclosure action in the Allegheny County Court of Common Pleas on January 11, 2011. SAC at ¶14. A few days later, the Debtor got a call from Five Brothers to make arrangements for the return of her car. Shortly after that, the car, the motorcycle, two boxes of items, a television,⁵ and a table and chair set were returned. The Debtor asked the person who returned these items what had happened to the rest of her personal property and was told that he did not know. SAC at ¶15.

The Debtor has not lived at the Residence since the removal of her personal property, she says initially that was due to the lack of furniture, with some vandalism that was done to the Residence later adding a further reason for absenting herself from it. She has instead been living elsewhere, while continuing to pay for the utilities on the Property. The Debtor filed her bankruptcy petition on February 18, 2011, and the within adversary proceeding was filed on May 17, 2011. Only the Bank and Five Brothers were originally named as Defendants. Safeguard was added as a Defendant only in the SAC.

DISCUSSION

The SAC contains ten Counts, but only the first eight name Safeguard as a Defendant. Counts I through III are causes of action under the Bankruptcy Code, while Counts IV through VIII are state common law tort claims. There is no dispute that these state law claims are governed by Pennsylvania law, and as to them, the Debtor asserts the Court has jurisdiction on the basis of diversity of citizenship under 28 U.S.C. §1332. The Court will discuss the Motion below with respect to each of the eight Counts.

(1) Count I — Turnover of Personal Property

The Debtor brings Count I pursuant to 11 U.S.C. §542(a), which provides in relevant part:

...an entity, other than a custodian, in possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title, or that the debtor may exempt under section 522 of this title, shall deliver to the trustee, and

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