The opinion of the court was delivered by: John Gleeson, United States District Judge
Stephanie Phifer brings this action claiming that defendants tricked her into transferring the deed to her home and encumbering the property with unwanted mortgages, allegedly keeping most of the proceeds for themselves. Defendant Fremont Investment & Loan, Inc. ("Fremont") has moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss Phifer's claims that (1) Fremont aided and abetted the fraud perpetrated by the other defendants, (2) Fremont violated New York General Business Law § 349, and (3) Fremont's mortgages on the property should be vacated pursuant to Article 15 of the New York Real Property Actions and Proceedings Law ("the RPAPL claim"). Fremont also moves to dismiss the RPAPL claim pursuant to Fed. R. Civ. P. 12(b)(7) for failure to join a necessary party. For the reasons set forth below, the motion is granted in part and denied in part.
Phifer's amended complaint makes the following factual allegations, which I accept as true for the purposes of this motion.
In April 1999, Phifer bought a one-family house in South Ozone Park, Queens. Compl. ¶ 20. She financed part of the purchase with a $183,450 mortgage from Professional Mortgage Bankers Corp. that was later assigned to Chase Manhattan Bank ("Chase"). Id. By March 2003, Phifer had fallen behind on her payments. Id. ¶ 21. Chase commenced a foreclosure action against the property, but in August 2003 Phifer and Chase agreed to modify the mortgage and the action was discontinued. Id. ¶ 21-22. In October 2004, however, Chase commenced a second proceeding due to Phifer's continued default. Id. ¶ 23.
In the summer of 2005, Phifer received flyers from Home Savers Consulting Corp. ("Home Savers"), one of which was titled: "The Foreclosure Doctor -- We Can Help You Save Your Property and Help You Keep Your Home." Id. ¶ 24. Ms. Phifer's mother called the telephone number printed on the flyer and spoke with Phil Simon. She told Simon that Phifer wanted to refinance her mortgage and did not want to lose her home. Id. ¶ 25. In a meeting at Phifer's house, Simon said "he could save plaintiff's home by getting her a new loan." Id. ¶ 26. He promised to "repair her credit" and "get someone to help her refinance her mortgage." Id. ¶ 27.
Phifer's mother instructed Simon "that she did not want her daughter to lose the deed" to the home, to which Simon represented that "without question the title would stay in plaintiff's name." Id. ¶ 28. Simon said that Home Savers would accept mortgage payments from Phifer for one year, hold the payments "in escrow" to prove Phifer's good faith and her ability to pay, and help Phifer improve her credit. Id.
Phifer alleges that based on these representations she believed Home Savers would "save" her house from foreclosure, obtain an affordable loan, and repair her credit. Id. ¶ 29. Phifer and her mother met with Simon two more times. See id. ¶ 30-31. The second time, he "reiterated that he would get plaintiff a lower interest rate and that her monthly mortgage payment would be about the same as before based on a new mortgage of about $290,000." Id. ¶ 31. Simon also instructed Phifer to file for Chapter 13 bankruptcy to stop the pending foreclosure sale. Id. ¶ 32. She complied by signing a bankruptcy petition and a check for $250 at Home Savers's office in Brooklyn. Id. ¶ 33.
On August 29, 2005, the closing took place at the offices of Home Savers in Freeport, New York. Id. ¶ 34. Simon was present, along with several other people, including Wayne Griffith, who Simon introduced as a "temporary" buyer of the home. Id. ¶ 35. He assured Phifer "this was merely a technicality and not to be concerned." Id. ¶ 36. Marvin Blakely, who Phifer had never met before, was introduced to Phifer as "your attorney." Id. ¶ 35. Also present were representatives from Fremont and the title company. Id.
Blakely then obtained Phifer's signature on several papers "in rapid succession," never "explaining their legal significance, or giving her the opportunity to read any of the papers." Id. ¶ 37. Phifer tried to ask questions, but was repeatedly and openly instructed by Simon "not to worry . . . and that he would give her more details later." Id. In the presence of the Fremont representative, Simon told Phifer that "she would remain on the title," and, when Phifer noticed two mortgages taken on the property totaling $415,000, "that the new mortgages were just temporary." Id. ¶ 37-38. At the end of the closing, Simon said, "Congratulations, you just refinanced your house." Id. ¶ 39.
Actually, Phifer had unwittingly signed a document transferring the title to her house to Griffith. Id. ¶ 44. Phifer was never given a copy of this document. See id. ¶ 40. Phifer had also signed a handwritten disbursement sheet and an agreement titled "Letter of Investors Program Mortgage Agreement," id., both of which she "had trouble understanding," id. ¶ 41. The disbursement sheet indicates that Blakely -- Phifer's purported attorney -- received payments for $80,065.47 and $46,065.40 out of the mortgage proceeds. See id. ¶ 51. The agreement, on which was written in large letters, "Helping You Keep Whats [sic] Yours," provided, "'[W]hereas for one year our mortgage saving program will pay your mortgage and return properties back to owner/seller on or about 1yr. It is further agreed that at the time of transfer owner/seller will not incur any financial charges for the transaction of deed and mortgage.'" Id. ¶ 41. The agreement also stated that Griffith, the "buyer of said property, would not have any legal responsibility or right to use or occupy or make any request to [sic] ownership of said property for the one year investment period agreement." Id. ¶ 42. Phifer claims that she continued to believe she retained title to her home despite the text of the agreement, in part because that document identified her below her signature as "Property Home Owner" and Griffith as "Property Buyer." Id. ¶ 43.
To finance the title transfer, two mortgage loans, for $332,000 and $83,000, were made by Fremont to Griffith. See id. ¶ 45. However, the only proceeds Phifer received from the unwitting transfer of title was a check for $19,437, signed by Tom L. Moonis, Fremont's settlement agent. Id. ¶ 48-49. This check was never explained to Phifer. Id. ¶ 49.
In January 2006, Phifer's mother discovered Phifer's name was no longer recorded on the deed. Id. ¶ 57. She contacted Simon, who sent her a "proposal" reflecting a ...