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Lori Jo Vincent, et al v. the Money Store

December 20, 2012

LORI JO VINCENT, ET AL., PLAINTIFFS,
v.
THE MONEY STORE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John G. Koeltl, District Judge:

OPINION AND ORDER

The plaintiffs, Lori Jo Vincent, Ruth Ann Gutierrez, Linda U. Garrido and John Garrido bring this purported class action (hereinafter "Vincent II") on behalf of themselves and all others similarly situated against The Money Store, TMS Mortgage, Inc., HomEq Servicing Corp. (collectively "The Money Store defendants"), Wells Fargo Bank, N.A. ("Wells Fargo"), Barclays Capital Real Estate, Inc. ("Barclays"), Ocwen Loan Servicing, LLC ("Ocwen"), and Moss, Codilis, Stawiarski, Morris, Schneider & Prior, LLP ("Moss Codilis").

The plaintiffs bring state law claims against all defendants for fraud, unjust enrichment, and unfair business practices in violation of California Business & Professions Code § 17200, et seq. The plaintiffs assert a breach of contract claim against The Money Store defendants. Finally, the plaintiffs assert a claim against Moss Codilis for the unauthorized practice of law in violation of § 12-5-115 of the Colorado Revised Statutes. Jurisdiction is asserted under the Class Action Fairness Act ("CAFA"). 28 U.S.C. § 1332(d).

The facts alleged in this recently-filed case are substantially the same as those asserted in a previous case in which this Court dismissed the federal claims and declined to exercise supplemental jurisdiction over state law claims. See Vincent v. Money Store ("Vincent I"), No. 03 Civ. 2876, 2011 WL 4501325 (S.D.N.Y. Sept. 29, 2011). Rather than pursuing their state law claims in state court, the plaintiffs brought their new action in federal court based on CAFA. All defendants now move pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment dismissing the plaintiffs' claims as barred by the statutes of limitations.*fn1 The plaintiffs respond that the claims are not time-barred based on various federal and state tolling doctrines that allegedly tolled the relevant statutes of limitations during the pendency of Vincent I.

I.

The standard for granting summary judgment is well established. "The [C]court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."

Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Gallo v. Prudential Residential Servs. L.P., 22 F.3d 1219, 1223 (2d Cir. 1994). "[T]he trial court's task at the summary judgment motion stage of the litigation is carefully limited to discerning whether there are genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue-resolution." Gallo, 22 F.3d at 1224.

The moving party bears the initial burden of "informing the district court of the basis for its motion" and identifying the matter that "it believes demonstrate[s] the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. The substantive law governing the case will identify those facts that are material and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also Behringer v. Lavelle Sch. for the Blind, No. 08 Civ. 4899, 2010 WL 5158644, at *1 (S.D.N.Y. Dec. 17, 2010).

In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); see also Gallo, 22 F.3d at 1223. Summary judgment is improper if there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party. See Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 37 (2d Cir. 1994). If the moving party meets its burden, the nonmoving party must produce evidence in the record and "may not rely simply on conclusory statements or on contentions that the affidavits supporting the motion are not credible . . . ." Ying Jing Gan v. City of New York, 996 F.2d 522, 532 (2d Cir. 1993); see also Scotto v. Almenas, 143 F.3d 105, 114-15 (2d Cir. 1998) (collecting cases); Behringer, 2010 WL 5158644, at *1.

II.

The facts alleged in the Amended Complaint in this case are substantially the same as those set out in this Court's opinion in Vincent I. They will only be repeated here as necessary for the present motions.

A.

The plaintiffs are individuals who took out home mortgage loans. See Vincent I, 2011 WL 4501325, at *2. Plaintiffs Linda U. Garrido and John Garrido are residents of New York. (Am. Compl. ¶ 7.) Plaintiff Ruth Ann Gutierrez is a resident of California. (Am. Compl. ¶ 6.) Plaintiff Lori Jo Vincent resides in Florida, but was a resident of Texas at the relevant time. (Am. Compl. ¶ 5; Declaration of W. Hans Kobelt, sworn to Apr. 4, 2012 ("Kobelt Decl.") ¶ 10.) The Money Store defendants serviced each of the loans. (Am. Compl. ¶¶ 20, 36, 45.)

The Money Store hired Moss Codilis to prepare and send default notices, or breach letters, to the plaintiffs after they had defaulted on their mortgage payments. (Moss Codilis R. 56.1 Stmt. at ¶ 1.) Each of the plaintiffs received such notices from Moss Codilis between 1997 and 2000. (Moss Codilis R. 56.1 Stmt. at ¶ 5; Am. Compl. ¶¶ 20, 36, 45.)

The plaintiffs contend that the breach letters contained false and misleading statements. They also contend that they were charged legal fees for the services of Moss Codilis when in fact the services performed by Moss Codilis were performed by persons who were not authorized to practice law in Colorado, where the services were performed. (See, e.g., Am. Compl. ¶¶ 55, 59, 75.) The plaintiffs also allege that The Money Store defendants charged fees that they had no right to collect. (See, e.g., Am. Compl. ¶ 72.)

Each of the plaintiffs loans were paid off in full. Vincent's loan was paid off by October 23, 2002. (Release of Lien, Kobelt Decl. Ex. K.) The Garridos' loan was paid in full by July 25, 2003. (Satisfaction of Mortgage, Kobelt Decl. Ex. M.) Gutierrez's loan was satisfied by June 4, 2004. (Full Reconveyance, Kobelt Decl. Ex. L.)

B.

The defendants in this case are the mortgage loan servicers, their alleged successors-in-interest, and Moss Codilis. Moss Codilis and The Money Store defendants were defendants in the Vincent I action. (See Am. Compl., Vincent v. Money Store, No. 03 Civ. 2876 (S.D.N.Y. Oct. 19, 2010), ECF No. 126.) Several of the defendants in Vincent II are alleged successors-in-interest to The Money Store defendants in Vincent I. Wells Fargo, Barclays, and Ocwen were not named defendants in Vincent I. (Barclays' R. 56.1 Stmt. at ¶ 2; Pl.'s Resp. to Barclays' R. 56.1 Stmt. at ¶ 2; see Am. Compl., Vincent

v. Money Store, No. 03 Civ. 2876 (S.D.N.Y. Oct. 19, 2010), ECF No. 126.) Wells Fargo admits that it is the successor-in-interest to The Money Store. (Wells Fargo R. 56.1 Stmt. at ¶ 9.) The plaintiffs allege, and Ocwen denies, that Ocwen is a successor-in-interest to The Money Store defendants and/or did business under the name HomEq. (Am. Compl. ¶ 12; Ocwen's Answer ¶ 12.)

The plaintiffs allege, and Barclays denies, that Barclays is a successor-in-interest to The Money Store defendants. (Am. Compl. ¶ 14; Barclays' Answer ¶ 14.) Barclays executed an asset purchase agreement in 2006 with Wachovia, HomEq, and certain of Wachovia's other subsidiaries. (Barclays' Answer ¶ 14.) Barclays alleges that, pursuant to the asset purchase agreement, it acquired the assets of HomEq Servicing Corporation, but not the liabilities. (Barclays' Answer ¶ 14.) Barclays admits that it did business under the name HomEq (as Barclays Capital Real Estate, Inc. d/b/a HomEq Servicing) from November 1, 2006 until Barclays Bank PLC sold the mortgage servicing assets in August 2010. (Barclays' Answer ¶ 14.) Barclays alleges that all of the named plaintiffs' mortgages were fully satisfied before the closing date of the asset purchase agreement and that it never serviced the mortgages of any of the named plaintiffs. (Barclays' Answer ¶¶ 25, 32, 34, 41, 50.)

C.

On April 24, 2003, the plaintiffs brought their initial action, Vincent I, against The Money Store defendants and Moss Codilis alleging violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1666d, and the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. (See Compl., Vincent v. Money Store, No. 03 Civ. 2876 (S.D.N.Y. Apr. 24, 2003), ECF No. 1.) The plaintiffs also alleged common law claims for breach of contract, fraud, unjust enrichment, and unfair business practices in violation of California Business and Professions Code § 17200, et seq. (Wells Fargo's R. 56.1 Stmt. ¶ 1.) The plaintiffs alleged, among other things, that they were charged improper legal fees and expenses by the defendants in connection with the mortgage loans they had taken out on their homes and that they were the victims of improper debt collection practices. The claims in Vincent I were timely filed.

On December 7, 2005, Judge Sprizzo granted partial summary judgment dismissing the plaintiffs' claims against The Money Store defendants under the FDCPA. See Vincent v. Money Store, 402 F. Supp. 2d 501 (S.D.N.Y. 2005). On September 29, 2011, this Court granted summary judgment dismissing the plaintiffs' claim under TILA, concluding that The Money Store defendants did not qualify as "creditors" under TILA and therefore could not be held liable under the statute. Vincent I, 2011 WL 4501325, at *5. The Court then declined to exercise supplemental jurisdiction over the plaintiffs' state law claims against The Money Store defendants and Moss Codilis on the basis that the only federal claim remaining in the action, the TILA claim, had been dismissed, and it was therefore appropriate to decline to exercise supplemental jurisdiction under 28 U.S.C. § 1367(c)(3). Id. at *5-7. On November 29, 2011, the Court denied the plaintiffs' motion for reconsideration and reaffirmed its decision to decline to exercise supplemental jurisdiction. See Vincent v. Money Store, No. 03 Civ. 2876, 2011 WL 5977812, at *4-5 (S.D.N.Y. Nov. 29, 2011).

On October 27, 2011, the plaintiffs filed a notice of appeal in Vincent I solely on the issue of the dismissal of the TILA claim. (See Notice of Appeal, Vincent v. Money Store, No.

03 Civ. 2876 (S.D.N.Y. Oct. 27, 2011), ECF No. 161.) The plaintiffs did not appeal the denial of supplemental jurisdiction over the state law claims. (See Pls.'-Appellants' Br., Vincent v. Money Store, No. 11 Civ. 4525 (2d Cir. Mar. 14, 2012), ECF No. 64, at 6.) Vincent I is now pending in the Second Circuit Court of Appeals.

On October 28, 2011, the plaintiffs commenced this action, alleging jurisdiction under CAFA, 28 U.S.C. § 1332(d), against The Money Store defendants and Moss Codilis. (See Compl.) CAFA expanded the availability of diversity jurisdiction to class action lawsuits alleging at least $5 million of damages so long as there is minimal diversity among the parties. See 28 U.S.C. § 1332(d); see also Holster v. Gatco, Inc., 618 F.3d 214, 215 (2d Cir. 2010); Blockbuster, Inc. v. Galeno, 472 F.3d 53, 56 (2d Cir. 2006). On December 28, 2011, the plaintiffs filed an amended complaint in which the plaintiffs added Barclays, Wells Fargo, and Ocwen as defendants. (See Am. Compl.) The state law causes of action against Wells Fargo, Ocwen, and Barclays are identical to the causes of action brought against The Money Store defendants in Vincent I. (See Am. Compl.; Wells Fargo's R. 56.1 Stmt. at ¶ 10; Pl.'s Resp. to Wells Fargo's R. 56.1 Stmt. at ¶ 10.)

III.

A.

Wells Fargo and Moss Codilis argue that the statutes of limitations have run on the state law claims asserted by the plaintiffs. When this action was filed on October 28, 2011, more than seven years had elapsed since the last loan by any of the plaintiffs had been fully paid. All parties agree that the initial limitations periods on all claims have run, and therefore the only issue is whether the statutes of limitations for the claims have been tolled by some available mechanism. The ...


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