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McAnaney v. Astoria Financial Corp.

September 12, 2006

DAVID MCANANEY, CAROLYN MCANANEY, JOHN REILLY, CONSTANCE REILLY, PHILIP RUSSO, AND CYNTHIA RUSSO, PLAINTIFFS,
v.
ASTORIA FINANCIAL CORP., ASTORIA FEDERAL SAVINGS & LOAN ASSOC., ASTORIA FEDERAL MORTGAGE CORP., LONG ISLAND BANCORP, INC., AND LONG ISLAND SAVINGS BANK, FSB, DEFENDANTS.



The opinion of the court was delivered by: Joseph F. Bianco, District Judge

MEMORANDUM AND ORDER

Plaintiffs bring this class action against various financial institutions alleging violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq., state consumer protection statutes, and common law fraud and unjust enrichment. Previously, the Court certified the following class of plaintiffs under Rules 23(b)(2) and (b)(3) of the Federal Rules of Civil Procedure:

All consumers or borrowers in the United States who had or currently have a mortgage or residential loan originated or purchased by any of the defendants and who wrongfully paid or will be demanded to pay closing fees, satisfaction fees, discharge fees, prepayment fees (or penalties), refinance fees (or penalties), attorney document preparation fees, facsimile fees, recording fees and any other fees, charges, false debts or finance charges in contravention of their mortgage or loan contracts or applicable laws.

Currently before the Court are the parties' cross-motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure; defendants' motion to amend their filings under Local Civil Rule 56.1, and their responses to plaintiffs' requests to admit; and plaintiffs' motion for costs and fees. For the reasons that follow, defendants' summary judgment motion is granted as to class plaintiffs' TILA claims that accrued on or before March 15, 2003. Moreover, because none of the named plaintiffs has a timely TILA claim, the remaining branches of the pending motions are dismissed without prejudice to the parties' refiling such motions following the substitution or intervention of new class representatives.

I. BACKGROUND AND PROCEDURAL HISTORY

A. Background

The underlying facts giving rise to this litigation are comprehensively described by Judge Spatt in a prior decision addressing defendants' motion to dismiss ("McAnaney I"), and by the undersigned in a prior decision granting plaintiffs' motion for class certification. See McAnaney v. Astoria Fin. Corp., 357 F. Supp. 2d 578, 581-82 (E.D.N.Y. 2005) ("McAnaney I"); McAnaney v. Astoria Fin. Corp., No. 04 Civ. 1101 (JFB); 2006 WL 2689621 (E.D.N.Y. Sept. 19, 2006) ("McAnaney II"). As such, the Court presumes the parties' familiarity with the facts of this case, and briefly recites only those facts adduced during discovery that are relevant to resolution of the instant motions.*fn1

1. The McAnaneys

On February 4, 1993, David and Carolyn McAnaney ("the McAnaneys") obtained a residential loan relating to their residence located at 32 Beach Road, Belle Terre, new York, in the form of a mortgage from Long Island Savings Bank ("LISB") (hereinafter, "the McAnaneys' first loan"). (Pls.' 56.1 ¶ 1.)*fn2 The McAnaneys' first loan was serviced by defendant LISB until that entity was acquired by defendant Astoria Federal Savings and Loan Association ("Astoria Federal") and/or defendant Astoria Financial Corporation ("Astoria Financial"). (Id. ¶ 3; Dfts.' Am. Resp. 56.1 ¶ 3.) Thereafter, Astoria Federal serviced the Mcananeys' first loan until it was sold to the Federal National Mortgage Association ("Fannie Mae"). (Pls.' 56.1 ¶ 5.)

On November 18, 2002, Astoria Federal sent the McAnaneys a "payoff letter" via facsimile, which listed several fees to be paid by the McAnaneys which were "necessary to satisfy" the Mcananeys' first loan. (Id. ¶ 6.) The amount listed on the payoff letter included (1) an "Atty Doc Prep Fee" of $125, (2) a "Facsimile Fee" of $25, and (3) a "Recording Fee" of $64.50.*fn3 (Id. ¶¶ 7, 14, 16; Pls.' Resp. 56.1 ¶¶ 67-69.)

It is undisputed that the McAnaneys should not have been charged the Atty Doc Prep Fee by Astoria Federal with regard to the McAnaneys' first loan. (Id. ¶ 9; Dfts.' Am. Resp. 56.1 ¶ 9.) According to defendants, Astoria Federal improperly demanded the Atty Doc Prep Fee from the McAnaneys due to a "programming error" in an automated computer system used by Astoria Federal. (Id. ¶ 9; Pls.' Resp. 56.1 ¶¶ 28-29.)

In any event, plaintiffs assert that the McAnaneys paid the Atty Doc Prep Fee to Astoria Federal, and that Astoria Federal retained the fee. (Pls.' 56.1 ¶ 8; Dfts.' Am. Resp. 56.1 ¶ 8.) However, defendants assert that, upon discovery of its error, Astoria refunded the fee to an escrow account held by the McAnaneys. (Id. ¶ 12; Dfts.' 56.1 ¶ 61; Pls.' Resp. 56.1 ¶ 61.) In addition, it is undisputed that Astoria Federal did not inform the McAnaneys that it had improperly demanded or collected the Atty Doc Prep Fee, or that it had refunded such a fee to the McAnaneys' escrow account. (Pls.' 56.1 ¶ 13; Dfts.' Am. Resp. 56.1 ¶ 13; Pls.' Resp. 56.1 ¶ 76.) It is undisputed that the McAnaneys paid the Facsimile Fee and the Recording Fee to Astoria Federal. (Pls.' 56.1 ¶ 15.)

The McAnaneys obtained a second residential loan from LISB concerning a property located at 121 Jayne Avenue, Port Jefferson, New York (hereinafter, "the McAnaneys' second loan"). (Pls.' 56.1 ¶ 25.) On November 18, 2002, Astoria Federal sent the McAnaneys a "payoff letter" relating to the McAnaneys' second loan, which listed several fees to be paid by the McAnaneys which were "necessary to satisfy" the loan. (Id. ¶ 29.) The amount listed on the payoff letter included (1) an "Atty Doc Prep Fee" of $125, (2) a "Facsimile Fee" of $25, and (3) a "Recording Fee" of $64.50. (Id. ¶¶ 30, 36, 38.)

It is undisputed that the McAnaneys paid each of these fees to Astoria Federal. (Id. ¶¶ 31, 37, 39.) It is also undisputed that, with regard the Atty Doc Prep Fee relating to the McAnaneys' second loan, Astoria Federal did not represent to the McAnaneys that such a fee had been improperly demanded or collected from the McAnaneys, or that such a fee was refunded to them by Astoria Federal. (Id. ¶¶ 34; Dfts.' Am. Resp. 56.1 ¶ 34.)

2. The Reillys

On or about March 28, 2002, John and Constance Reilly ("the Reillys") obtained a residential loan in the form of a mortgage from Astoria Federal (hereinafter, "the Reilly loan"). (Pls.' 56.1 ¶ 47.) The Reilly loan was serviced by Astoria Federal until the time it was repaid. (Id. ¶ 49.) On April 16, 2004, and April 19, 2004, respectively, Astoria Federal sent the Reillys two "payoff letters" which listed several fees to be paid by the Reillys that were "necessary to satisfy" the loan, including (1) an "Atty Doc Prep Fee" of $125, (2) "Facsimile Fees" of $25 and $50, and (3) a "Recording Fee" of $44.50. (Id. ¶¶ 51, 53, 59, 62; Dfts.' 56.1 ¶¶ 97-98.)

It is undisputed that the Reillys paid the Atty Doc Prep Fee and the Facsimile Fee to Astoria Federal, and that Astoria Federal deducted the Recording Fee from funds held in escrow by Astoria Federal for the Reillys. (Pls.' 56.1 ¶¶ 55-56, 61, 64; Dfts.' Am. Resp. 56.1 ¶¶ 55-56, 61, 64; Dfts.' 56.1 ¶¶ 46-47, 103; Pls.' Resp. 56.1 ¶¶ 46-47, 103.) Furthermore, it is undisputed that Astoria Federal did not represent to the Reillys that the Atty Doc Prep Fee had been improperly demanded or collected from the Reillys, or that such a fee was refunded to them by Astoria Federal. (Pls.' 56.1 ¶ 58; Dfts.' Am. Resp. 56.1 ¶ 58.)

3. The Russos

On or about November 12, 1993, Philip and Cynthia Russo ("the Russos") obtained a residential loan from LISB in the form of a mortgage ("the Russo loan"). (Pls.' 56.1 ¶ 72.) The Russo loan was serviced by LISB until the bank was acquired by Astoria Federal; thereafter, the loan was serviced by Astoria Federal until it was repaid. (Id. ¶¶ 74-75.) On June 2, 2004, Astoria Federal sent to the Russos a "payoff letter" which listed several fees to be paid by the Russos that were "necessary to satisfy" the Russo loan, including (1) an "Atty Doc Prep Fee" of $125,(2) a "Facsimile Fee" of $25, and (3) a "Recording Fee" of $64.50. (Id. ¶¶ 51, 53, 59, 62; Dfts.' 56.1 ¶¶ 83, 85; Pls.' Resp. 56.1 ¶¶ 83, 85.) It is undisputed that the McAnaneys paid the Facsimile Fee and the Recording Fee to Astoria Federal. (Pls.' 56.1 ¶ 15.)

It is undisputed that the Russos should not have been charged the Atty Doc Prep Fee by Astoria Federal. (Id. ¶ 80; Dfts.' Am. Resp. 56.1 ¶ 80.) According to defendants, Astoria Federal improperly demanded the Atty Doc Prep Fee from the Russos due to a "programming error" in an automated computer system used by Astoria Federal. (Id. 56.1 ¶ 81.) In any event, plaintiffs assert that the Russos paid the Atty Doc Prep Fee to Astoria Federal, and that Astoria Federal retained that fee. (Pls.' 56.1 ¶ 81; Dfts.' Am. Resp. 56.1 ¶ 81.) However, defendants assert that, upon discovery of its error, Astoria Federal refunded the fee to an escrow account held by the Russos. (Id. ¶ 81; Dfts.' 56.1 ¶ 61; Pls.' Resp. 56.1 ¶ 61.) Astoria Federal did not inform the McAnaneys that it had improperly demanded or collected the Atty Doc Prep Fee, or that it had refunded such a fee to the McAnaneys' escrow account. (Pls.' 56.1 ¶¶ 83-84; Dfts.' Am. Resp. 56.1 ¶¶ 83-84.)

On May 8, 2002, the Russos also obtained a residential loan from Astoria Federal in the form of a Home Equity Line of Credit ("the Russos' HELOC"). (Pls.' 56.1 ¶ 95.) The Russos' HELOC was serviced by Astoria Federal until it was repaid. (Id. ¶ 97.) In two "payoff letters" dated, respectively, June 2, 2004, and June 16, 2004, Astoria Federal listed the amounts "necessary to satisfy" the Russos' HELOC loan, including (1) a "Satisfaction Fee/Atty Document Preparation Fee" of $125, and (2) a "County Clerk Fee/Recording Fee" of 64.50. (Id. ¶¶ 98-101, 107.) It is undisputed that the Russos paid both fees to Astoria Federal. (Pls.' 56.1 ¶¶ 106, 111; Dfts.' Am. Resp. 56.1 ¶¶ 106, 111.) Plaintiffs assert that Astoria Federal improperly demanded and collected the fees from the Russos. (Pls.' 56.1 ¶ 103; Dfts.' Am. Resp. 56.1 ¶ 103; Dfts.' 56.1 ¶ 92; Pls.' Resp. 56.1 ¶ ...


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