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Jordan v. Chase Manhattan Bank

United States District Court, S.D. New York

July 31, 2014



PAUL A. ENGELMAYER, District Judge.

Plaintiff Kathryn Grace Jordan, proceeding pro se, brings this action against defendants Chase Manhattan Bank ("Chase"), Chase Bank USA National Association, JP Morgan Chase & Co. ("JP Morgan"), JP Morgan Acquisition Trust 2007-CH3;JPMMAC 2007-CH3, and Chase Home Finance (collectively, the "Chase Defendants"); Deutsche Bank AG ("Deutsche Bank"); Deutsche Bank National Trust Company; and Shutts & Bowen, a law firm in Miami, Florida. Jordan brings numerous claims arising out of the 2006 refinancing of her mortgage on a property in Florida, the 2009 foreclosure of that property, and a 2012 garnishment action brought against Jordan in Florida state court. Defendants move to dismiss the Amended Complaint, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. For the reasons that follow, defendants' motion is granted.

I. Background

A. Facts[1]

Jordan held a mortgage, originated by Chase Home Finance, on a residence in Palm Beach, Florida (the "Florida property"). Am. Compl. at 2-3. At some point in 2006, Jordan refinanced the mortgage with Chase. Id. at 2. Chase verbally promised to maintain the same loan term in the refinanced mortgage as in the original mortgage, at a loan rate competitive with other banks in the area. Id. at 3. Jordan alleges that she relied on these representations in moving forward with the refinancing; however, before the transaction was completed, the "Title Agent had swapped' out the loan for a shorter term ARM [adjustable-rate mortgage]." Id. at 3-4. Jordan informed Chase of the discrepancy between her understanding of the loan term and what was represented by the loan documents, and received a "promise to modify the loan documents" from Chase; however, Jordan later "realized that Chase had breached its promise to her regarding the rate and term" of the refinanced mortgage. Id. at 4.

At some point after the refinancing, Jordan requested a modification of her mortgage, and was denied. Id. According to Jordan, Chase, Deutsche Bank, and an attorney representing the condominium in which the Florida property was situated, colluded "in a scheme to force [Jordan] out of her property." Id. at 4-5. Although Jordan retained counsel to aid in her attempt to renegotiate the mortgage, the Florida property was ultimately foreclosed upon in 2009. Id. at 6. Jordan states that Deutsche Bank commenced the foreclosure, which was concluded by Chase Home Finance. Id. at 2. As a result, she "had to endure years of housing instability and inferior housing due to the credit impact of the foreclosure." Id. at 6. Chase also dissolved one of Jordan's lines of credit without notice, charged her fees and penalties, and generally "[t]reat[ed] [her] as an inferior customer." Id. at 13-14.

On January 19, 2012, a garnishment action was commenced against Jordan in Florida state court, apparently to collect an award of attorney's fees granted to the opposing party in an earlier pro se suit filed by Jordan against the managers of the Florida property. Id. at 7. Jordan claims that the award of attorney's fees was the product of "Case Fixing'" between the Florida state court judges and the opposing attorneys, as well as a "systematic form of Discrimination against not only Pro Se litigants but the Disabled." Id. Jordan alleges that federal and state law required Chase, as garnishee, to refrain from freezing funds in her bank account that represented "exempt federal benefit payments, " id. at 7-8 (internal quotation marks omitted); however, Chase "refused to escrow" the funds Jordan claims were exempt from garnishment, such that she had no access to those funds, and was unable to "buy food, medication, pay for housing, and travel to her physicians, " id. at 8. In the course of the garnishment proceedings, Jordan alleges, "the Court made increasingly abusive invasions into [Jordan's] financial privacy, " and an attorney from Shutts & Bowen, representing Chase, along with an attorney for the judgment creditor, engaged in "collusive threats and schemes... to try to gain illicit access to [Jordan's] Chase assets." Id. at 9.

Jordan further claims that Chase "expressed concerns and biases about the Refi application of [Jordan] especially the nature of her Disability Income, initially refusing the application" as a result of "irrational fears about the reliability of [Jordan's] income as a disabled person." Id. at 15. Jordan alleges that, presumably during the time when she was attempting to modify the mortgage, "Chase never disclosed any HAMP programs" to her, [2] despite being "obligated under the FHA, ECOA, CPA, and other statutes" to disclose "all options available to her particularly given her Disability status." Id. at 16. Jordan alleges that Chase "failed to do so due to their discriminatory animus toward her as a Disabled person." Id. Jordan claims that Chase was "legally obligated... to offer [Jordan] the best program available, and to consider her application equally to Non-Disabled persons, " but instead prejudged the situation "as evidenced by the Deut[s]che [B]ank early booking' as a foreclosed loan, the pressure on [Jordan] to leave her home and to accept a less than fair offer, and the belated uncompetitive offers." Id. at 17. According to Jordan, "[i]t is apparent from the long patter[n] of facts, that Chase was excessively anxious about [Jordan] as a Disabled person, " id., and Chase's failure to follow the law regarding the garnishment of exempt funds "clearly was related to Chase's long biases against [Jordan] as a disabled person, " id. at 19.

B. Procedural History

On December 19, 2013, Jordan filed her initial complaint. Dkt. 1. On January 9, 2014, defendants filed a motion to dismiss for lack of jurisdiction, as well as a memorandum of law and declaration in support of this motion. Dkt. 5-7. On March 26, 2014, after receiving several extensions, Jordan filed her Amended Complaint, Dkt. 21. The same day, Jordan filed a document styled an affidavit in support of the Amended Complaint. Dkt. 20. The Amended Complaint consists of six "counts, " a number of which entail multiple parts, or, in Jordan's prose, "acts, " and some of which appear to invoke multiple statutes or common-law causes of action. Specifically:

Count One alleges breach of contract and bad faith in connection with defendants' alleged failure to refinance Jordan's mortgage at the rate and duration she claims were promised, and the alleged collusion that led to Jordan's foreclosure. Id. at 3-5. Count One also claims that defendants failed to put in escrow and release funds during garnishment, in violation of (1) § 407 of the Social Security Act ("SSA"), 42 U.S.C. § 407, and its implementing regulations, 31 C.F.R. § 212 et seq.; (2) the Consumer Credit Protection Act ("CCPA"), specifically, the restrictions on garnishment contained in 15 U.S.C. § 1673[3]; and (3) New York and Florida statutory law. Id. at 7-8. Count One also alleges collusion between the Chase defendants and the judgment creditor. Id. at 12-13. Finally, Count One alleges that defendants' acts after the foreclosure-including closure of a line of credit, and the assessment of fees and penalties-amounted to a breach of contract and bad faith. Id. at 13-14.

Count Two alleges, in connection with the refinancing of Jordan's mortgage, the foreclosure of the Florida property and the ensuing developments relating to Jordan's retail banking accounts, and the garnishment action, discrimination by the defendants in violation of several Florida statutes; the Fair Housing Act, 42 U.S.C. § 3601 et seq. ("FHA"); and the CCPA, particularly, the Equal Credit Opportunity subchapter, 15 U.S.C. § 1691. Id. at 14-17, 19, 24, 26.

Counts Three through Six allege, respectively, violations of four Florida laws: those against coercion, fraudulent misrepresentation, negligent misrepresentation, and fraud in the inducement. Id. at 26-35. These claims arise from the same actions that underlie Counts One and Two. Id.

In the Amended Complaint, Jordan seeks "[f]ull restitution... of the replacement value of the lost property, " amounting to $1, 265, 000. Id. at 36. She also seeks all direct and indirect costs and expenses incurred by her in relation to the refinancing, foreclosure, and garnishment action, as well as "[a]ll Tort like damages" deriving from those events. Id. at 36-37.

On April 17, 2014, defendants filed a motion to dismiss the Amended Complaint, Dkt. 29, as well as a memorandum of law, Dkt. 30 ("Def. Br."), and a declaration in support of that motion, Dkt. 31 ("Blaine Decl."). Defendants argue that the Amended Complaint should be dismissed pursuant to Rule 12(b)(1) for lack of jurisdiction, on the ground that both Jordan and one of the defendants, JP Morgan Chase & Co., reside in New York, and thus there is no diversity of citizenship. Def. Br. at 2. Defendants do not perceive Jordan to be raising claims under federal law, which would enable her to invoke the Court's federal question jurisdiction. In the alternative, defendants argue that the Amended Complaint should be dismissed pursuant to Rule 12(b)(6) for failure to state a claim. Id. On May 21, 2014, Jordan filed an opposition to the motion to dismiss. Dkt. 38 ("Pl. Br."). On May 27, 2014, defendants replied. Dkt. 41 ("Def. Reply Br.").

II. Applicable Legal Standards

A. Rule 12(b)(1)

"Determining the existence of subject matter jurisdiction is a threshold inquiry and a claim is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.'" Zahl v. Kosovsky, No. 08 Civ. 8308 (LTS) (THK), 2011 WL 779784, at *4 (S.D.N.Y. Mar. 3, 2011) (quoting Arar v. Ashcroft, 532 F.3d 157, 168 (2d Cir. 2008)), aff'd, 471 F.Appx. 34 (2d Cir. 2012). Once subject matter jurisdiction is challenged, the plaintiff "has the burden of proving by a preponderance of the evidence that jurisdiction exists." Giammatteo v. Newton, 452 F.Appx. 24, 27 (2d Cir. 2011) (citing Makarova v. United States, 201 F.3d 110, 113 (2d Cir. ...

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