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Curtis v. Cenlar Fsb

United States District Court, Second Circuit

November 12, 2013

THOMAS M. CURTIS, Plaintiff,

Thomas M. Curtis, proceeding pro se, New York, NY, for the plaintiff.

Robert D. Helfand, Jorden Burt, Jorden Burt, LLP, Simsbury, CT Andrew T. Solomon, Karen E. Abravanel, Sullivan & Worcester, LLP, New York, NY, for the defendants Assurant, Inc., and American Security Insurance Company.


DENISE COTE, District Judge.

On June 7, 2013, defendants Assurant, Inc. ("Assurant") and American Security Insurance Company ("American Security") (collectively "Assurant defendants") filed a motion to dismiss the complaint of pro se[1] plaintiff Thomas M. Curtis ("Curtis") on the grounds that Curtis lacks standing to sue them and that he fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(1), 12(b)(6). For the following reasons the motion to dismiss is granted pursuant to Rule 12(b)(6).


This action arises out of a dispute over whether Curtis was required to purchase wind insurance on a second home located in West Palm Beach, Florida. In December 2008, Curtis purchased the second home. Curtis's mortgage is held by co-defendant Federal Home Loan Mortgage Corporation ("Freddie Mac") and is serviced by co-defendant Cenlar, FSB, and/or Cenlar Agency, Inc. (collectively "Cenlar"). The Mortgage provides in relevant part that:

Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term extended coverage, ' and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance.

Concurrently with the purchase of the home, Curtis acquired a homeowners property insurance policy. The policy excluded coverage for damage caused by wind. Curtis renewed the insurance policy each year thereafter with some modifications, but he never obtained wind coverage.

In October 2012, Cenlar sent a letter to Curtis informing him that the terms of his mortgage purportedly required him to acquire wind insurance. Curtis responded that wind coverage was not specifically required by his mortgage and that Cenlar had accepted his insurance policy for the prior three years. Following Curtis's refusal to purchase wind coverage, Cenlar purchased a policy which included wind coverage on his behalf at an annual premium of $7, 512.91, which was billed to Curtis's escrow account. That policy was issued by American Security, a co-defendant and movant here. American Security is a subsidiary of Assurant, also a co-defendant and movant here.

On April 4, 2013, Curtis filed this complaint against Cenlar, Freddie Mac, American Security, and Assurant in the Supreme Court of the State of New York, County of New York. Curtis makes several claims against the various defendants in his complaint. Only one of the claims is alleged against the two moving Assurant defendants.[2] Curtis claims that an arrangement between Cenlar and the Assurant defendants improperly inflated the price of the insurance policy placed on his home by Cenlar. Curtis alleges that "Cenlar direct[ed] its right to contract for property insurance on behalf of lenders pursuant to mortgage requirements to American Security, " and that "[t]he actual cost of the insurance thus placed is inflated by commissions and other remuneration paid to Cenlar." He argues that inflating the price of insurance in this manner violates the Florida Deceptive and Unfair Trade Practices Act, which provides that "[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful." Fla. Stat. ยง 501.204(1). Curtis seeks "not less than $50, 000" in damages, and attorneys fees and a declaratory judgment.

On May 3, 2013, American Security filed a Notice of Removal to this Court. On June 14, 2013, Curtis filed a motion to remand this case to state court on the ground that this Court lacked subject matter jurisdiction over the claims. The motion to remand was denied in an Opinion and Order of October 3, 2013. See Curtis v. Cenlar FSB, 13 CIV. 3007 (DLC), 2013 WL 5495554 (S.D.N.Y. Oct. 3, 2013). On June 7, 2013, the Assurant defendants filed this motion to dismiss for lack of standing, pursuant to Rule 12(b)(1), and for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6). At a June 14 conference Curtis represented that he did not wish to amend his complaint in response to the motion to dismiss.


Although the Assurant defendants bring their motion to dismiss under both standing and failure to state a claim theories, their arguments are not properly characterized as standing arguments. All of the defendants' contentions concern the legal merits of Curtis's complaint. They reason that because Curtis loses on the merits, he has not suffered any "cognizable injury that is traceable to the acts of the Assurant defendants and he lacks standing to sue them." But this reasoning would allow any Rule 12(b)(6) motion to be restyled as a Rule 12(b)(1) standing motion. While standing and merits questions frequently overlap, standing is fundamentally about the propriety of the individual litigating a claim irrespective of its legal merits, while a Rule 12(b)(6) inquiry is concerned with the legal merits of the claim itself. See generally Allen v. Wright , 468 U.S. 737, 751 (1984) (defining the standing inquiry as "to ascertain whether the particular plaintiff is entitled to an adjudication of the particular claims asserted."). Here, the defendants are not contending that Curtis is the wrong individual to bring these legal claims; they are arguing that the claims are simply not legally cognizable. Consequently, although "the jurisdictional [standing] issue must be resolved before the merits issue" in a case, Alliance For Envtl. Renewal, Inc. v. Pyramid Crossgates Co. , 436 F.3d 82, 85 (2d Cir. 2006), the defendants' arguments are not properly understood as standing arguments and this motion will be decided under Rule 12(b)(6).

To survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (citation omitted). Applying this plausibility standard is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. When considering a motion to dismiss, a trial court must "accept all allegations in the complaint as true and draw all inferences in the non-moving party's favor." LaFaro v. New York Cardiothoracic Group, PLLC , 570 F.3d 471, 475 (2d Cir. 2009). A complaint must do more, however, than offer ...

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