United States District Court, S.D. New York
ANTONIO CASTELLANO, AS ADMINISTRATOR OF THE ESTATE OF MICHAELANGELO CASTELLANO, AND VITO CASTELLANO, Plaintiffs,
JP MORGAN CHASE BANK, N.A., U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR IN INTEREST OF BANK OF AMERICA, NATIONAL ASSOCIATION AS TRUSTEE AS SUCCESSOR BY MERGER TO LASALLE BANK ASSOCIATION, AS TRUSTEE FOR CERTIFICATEHOLDERS OF BEAR STEARNS ASSET BACKED SECURITIES 1 LLC, ASSET-BACKED CERTIFICATES, SERIES 2005-FRI, EMC MORTGAGE CORPORATION, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (
OPINION AND ORDER
NELSON S. ROMN, District Judge.
Antonio Castellano, as Administrator of the Estate of Michaelangelo Castellano, and Vito Castellano (together, "Plaintiffs") filed this action against Defendants JP Morgan Chase Bank, N.A., U.S. Bank National Association, as Trustee Successor in Interest of Bank of America, National Association as Trustee as Successor by Merger to LaSalle Bank Association, as Trustee for Certificate Holders of Bear Stearns Asset Backed Securities 1 LLC, Asset-Backed Certificates, Series 2005-FR 1, EMC Mortgage Corporation, and Mortgages Electronic Registartaion System, Inc. ("MERS") (collectively, "Foreclosure Defendants"), Steven J. Baum, and Steven J. Baum, P.C. (collectively, "Baum Defendants") on February 22, 2013 in the Supreme Court of the State of New York, Westchester County. Plaintiffs assert: (1) breach of contract; (2) breach of contract - voidable mortgage; (3) fraud; (4) wrongful foreclosure; (5) wrongful foreclosure - having no legal right to foreclose; (6) wrongful foreclosure - not in compliance with Real Property Actions and Proceedings Law ("RPAPL") §§ 1303, 1304 and 1306; (7) wrongful foreclosure; (8) wrongful foreclosure - violation of state banking laws; (9) violation of the Federal Truth in Lending Act ("TILA") § 102 et seq., and NY General Business Law § 349(a); (10) violations of the Fair Credit and Reporting Act ("FCRA"); (11) negligence; (12) negligence; (13) breach of the implied covenant of good faith and fair dealing; and (14) unjust enrichment. The Foreclosure Defendants removed the action from state court on May 20, 2013 pursuant to 28 U.S.C. § 1441(b). On August 20, 2013, the Supreme Court, Westchester County issued a temporary restraining order in the Foreclosure Action and stayed all proceedings pending the outcome in this case. Currently before the Court is the Foreclosure Defendants' motion to dismiss for lack of subject matter jurisdiction, failure to state a claim, or judgment on the pleadings, as well as the Baum Defendants' motion to dismiss for failure to state a claim and lack of subject matter jurisdiction. For the following reasons, the motions are GRANTED.
On June 30, 1978, Vito Castellano and Michaelangelo Castellano purchased the premises located at 196 Midland Avenue, Tuckahoe, New York, 10707, designated as Section 25, Block 2 and Lot 1B on the tax map. At the time of purchase, a deed of sale was issued to Michaelangelo and Vito Castellano as tenants in common, with each having a one-half undivided interest in the property. Pl. Compl. ¶ 2. On April 15, 2005, Fremont Investment & Loan issued a Note and Mortgage in the amount of $100, 000 to Vito Castellano, in which Michaelangelo Castellano did not join. Id. at ¶ 4, 14.
A foreclosure action was commenced on February 28, 2007 in the Supreme Court of the State of New York, County of Westchester, Index Number 3387/2007, entitled LaSalle Bank National Association, As Trustee for Certificateholders of Bear Stearns Asset-Backed Securities I LLC, Asset-Backed Certificate, Series 2005-FR1 C/O EMC Mortgage Corporation v. Vito Castellano, Michaelangelo Castellano, Tina Castellano, John Doe 1 and John Doe 2 (hereinafter, "Foreclosure Action"). Id. at ¶ 20. Steven J. Baum, P.C. acted as counsel for plaintiffs in the Foreclosure Action. Id. The claims asserted were for a judgment of foreclosure against Vito Castellano, for reformation of the mortgage to include Michaelangelo Castellano as a mortgagor, and for an equitable lien against the property. Id. at ¶ 21. Defendants Michaelangelo Castellano and Vito Castellano answered the complaint with two affirmative defenses: (1) the claims against Michaelangelo Castellano were barred by the statute of frauds and (2) the complaint failed to state a claim against Michaelangelo Castellano. Id. at ¶ 23; Pollack Dec. Ex. C. Thereafter, Steven J. Baum, P.C. filed a motion for summary judgment and for an order of reference which sought to discontinue the second and third claims and to dismiss Michaelangelo Castellano from the case. Compl. ¶ 25; Pollack Dec. Ex. D.
The Castellanos opposed the summary judgment motion, and in doing so stated in an affirmation that it was not proper to dismiss Michaelangelo Castellano from the action. Pollack Dec. Ex. E. Plaintiff submitted a reply affirmation in which it stated to the court that it was willing to dismiss the Complaint as against Michaelangelo Castellano and proceed only against Vito Castellano. Id. at Ex. F. On September 12, 2008, the court issued its decision and sided with the Castellanos, stating, "Defendants correctly argue that said defendant [Michaelangelo Castellano], who is named on the subject deed, is a necessary party." Id. at Ex. G. The court granted the relief requested in the summary judgment motion, including for judgment of foreclosure, as unopposed. Id. No appeal was taken from this order. On December 22, 2008, plaintiffs served a Notice of Entry of the Summary Judgment Order and on March 9, 2009, filed a Motion for Execution of Judgment of Foreclosure and Sale. Id. at Ex. H. On September 24, 2009, the Castellanos opposed the Motion for Execution of Judgment of Foreclosure and Sale stating, "Michaelangelo Castellano is not a proper party defendant and plaintiff has already admitted this." Id. at Ex. I. This position was contradictory to the position taken by defendants in opposition to the summary judgment motion. On October 29, 2009, the court granted the motion for judgment of foreclosure and sale. It stated, "Defendants' objection herein is based solely on Michaelangelo Castellano's inclusion as a named defendant is without merit, particularly given that in opposition to plaintiff's earlier summary judgment motion, defendants had then argued, and this Court had agreed, that Michaelangelo Castellano is a necessary party." Id. at Ex. K.
II. Legal Standards
a. 12(b)(1) Motion to Dismiss Standard
On a motion to dismiss for "lack of subject matter jurisdiction, " Fed.R.Civ.P. 12(b)(1), dismissal of a case is proper "when the district court lacks the statutory or constitutional power to adjudicate it." Nike, Inc. v. Already, LLC, 663 F.3d 89, 94 (2d Cir. 2011) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)).
b. 12(b)(6) Motion to Dismiss Standard
On a motion to dismiss for "failure to state a claim upon which relief can be granted, " Fed.R.Civ.P. 12(b)(6), this Court accepts all factual allegations in the complaint as true and draws all reasonable inferences in the plaintiff's favor. Ruotolo v. City of N.Y., 514 F.3d 184, 188 (2d Cir. 2008). Dismissal is proper unless the complaint "contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Aschroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); accord Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010). "Although for the purposes of a motion to dismiss [a court] must take all of the factual allegations in the complaint as true, [it is] not bound to accept as true a legal conclusion couched as a factual allegation.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555).
The materials that may be considered on a motion to dismiss are limited to "the facts asserted within the four corners of the complaint, the documents attached to the complaint as exhibits, and any documents incorporated in the complaint by reference." McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir.2007). The Court may also consider "matters of which judicial notice may be taken, " Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993), which includes documents filed in other courts. See, World Wrestling Entm't, Inc. v. Jakks P. Inc., 425 F.Supp.2d 484, 508 n. 16 (S.D.N.Y. 1999) ("the Court properly can take judicial notice of the filings and the October 16, 2003 Order in the Connecticut state court action."); see also Green v. Warden, U.S. Penitentiary, 699 F.2d 364, 369 (7th Cir. 1983) ("[F]ederal courts may also take notice of proceedings in other courts, both within and outside of the federal judicial system, if the proceedings have a direct relation to matters at issue.").
Fed. R. Civ. P. 12(b)(6) warrants dismissal of a claim under the doctrine of res judicata where "it is clear from the face of the complaint, and matters of which the court may take judicial notice, that the plaintiff's claims are barred as a matter of ...