United States District Court, S.D. New York
TINA BELLINO, on behalf of herself and all others similarly situated, Plaintiff,
JPMORGAN CHASE BANK, N.A., Defendant.
OPINION & ORDER
NELSON S. ROMAN, District Judge.
Before the Court is Defendant JPMorgan Chase Bank, N.A.'s ("JPMC") motion to dismiss Plaintiff Tina Bellino's complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. The Complaint purports to bring a class action based on JPMC's alleged violation of certain real property recording statutes. For the following reasons, the motion is DENIED.
On March 17, 2004, the sole plaintiff named in this putative class action, Tina Bellino, obtained a $300, 000 mortgage loan from JPMC to purchase a house located at 46 Highland Avenue in Tarrytown, New York. (Compl. Ex. 1, ECF No. 1.) On May 11, 2012, Bellino sold the house. (Id. ¶ 12.) At some point thereafter, Bellino used the proceeds from the sale to pay off the outstanding principal, interest, and fees due on the mortgage. (Id. ¶ 12.) On May 21, 2012, JPMC signed a satisfaction of mortgage certificate (the "Certificate") acknowledging that Bellino had paid all remaining debts to JPMC. (Id. Ex. 1.) The Westchester County Clerk's Office (the "Clerk") recorded the Certificate on June 21, 2012. ( See id. Ex. 1.)
Plaintiff commenced this putative class action on May 2, 2014, seeking relief on behalf of thousands of mortgagors. Bellino alleges that JPMC failed to timely present certificates of satisfaction for recording pursuant to the Statutes. ( See id. ¶¶ 22, 29.) Specifically, Bellino alleges that the Statutes require JPMC to present certificates of satisfaction to the Clerk within thirty days of receiving the balance due on the mortgage. (Id. ¶ 24-25.) The Complaint does not specify the date on which Bellino allegedly tendered the funds to JPMC or the date on which JPMC allegedly presented the Certificate for Bellino's mortgage to the Clerk. Rather, Bellino asserts that JPMC must have presented the Certificate outside of the thirty-day period because the Clerk generally records certificates "expeditiously upon presentment" and the Certificate was recorded forty-one days after the sale of the mortgaged property. (Id. ¶¶ 17, 26, 33.)
On June 14, 2014, JPMC made an Offer of Judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure (the "Rule 68 Offer"), proposing that Bellino dismiss the Complaint in exchange for $1, 001.00 plus attorney fees, costs, interest, and any additional amount Bellino could be due individually as a result of failure to timely present the Certificate. (Def.'s Mem. Law Supp. Mot. Dismiss 7, ECF No. 19 [hereinafter Def.'s Mem.].) See also Fed.R.Civ.P. 68. The monetary component of the settlement exceeded the amount JPMC would have owed Bellino had JPMC failed to file the Certificate within sixty days. See N.Y. Real Prop. Acts. § 1921; N.Y. Real Prop. § 275. ( See also Def.'s Mem. 7.) Bellino did not accept the Rule 68 Offer and it lapsed on June 28, 2014. See Fed.R.Civ.P. 68(a)-(b).
JPMC moves to dismiss on two grounds. First, JPMC asserts that the case is moot because Bellino rejected the Rule 68 Offer, which exceeded JPMC's potential liability to Bellino in this action. (Def.'s Mem. 6.) As a corollary, JPMC argues that Bellino lacks standing and thus cannot represent similarly situated mortgagors, precluding class certification. (Def.'s Mem. 8-9.) Second, JPMC argues that the thirty-day period for presentment under the Statutes runs from the date on which the certificate is signed, not the date on which a borrower pays off the mortgage loan. (Def.'s Mem. 12.) See N.Y. Real Prop. Acts. § 1921; N.Y. Real Prop. § 275. JPMC claims that it did not violate the Statutes because the Clerk recorded the Certificate within thirty days of the date on which JPMC signed the Certificate. JPMC also argues that Bellino insufficiently pleaded the payoff and presentment dates and without these two facts, the allegations in the Complaint lack the requisite specificity.
STANDARD ON A MOTION TO DISMISS
If a named plaintiff's claims "become moot before class certification, the entire case is to be dismissed for lack of subject matter jurisdiction" upon a Rule 12(b)(1) motion. Amblau v. Rosenblatt, 194 F.R.D. 451, 453 (E.D.N.Y. 2000). 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." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). District courts lack the power to adjudicate moot cases. Doyle v. Midland Credit Mgmt., 722 F.3d 78, 80 (2d Cir. 2013). Typically, "[w]hen jurisdiction is challenged, the plaintiff bears the burden of showing by a preponderance of the evidence that subject matter jurisdiction exists." Arar v. Ashcroft, 532 F.3d 157, 168 (2d Cir. 2008), rev'd on other grounds, 585 F.3d 559 (2d Cir. 2009). But when "the case is at the pleading stage and no evidentiary hearings have been held... [a court] must accept as true all material facts alleged in the complaint and draw all reasonable inferences in the plaintiff's favor." Conyers v. Rossides, 558 F.3d 137, 143 (2d Cir. 2009) (internal citations and quotations omitted).
To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must provide grounds upon which a claim rests through "factual allegations sufficient to raise a right to relief above the speculative level.'" ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, the complaint must allege "enough facts to state a claim to relief that is plausible on its face." Starr v. Sony BMG Music Entm't, 592 F.3d 314, 321 (2d Cir. 2010) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In applying this standard, a court should accept as true all well-pleaded factual allegations, but should not credit "mere conclusory statements" or "[t]hreadbare recitals of the elements of a cause of action." Id. A court should give "no effect to legal conclusions couched as factual allegations." Port Dock & Stone Corp. v. Oldcastle Ne., Inc., 507 F.3d 117, 121 (2d Cir. 2007) (citing Twombly, 550 U.S. at 555).
I. Defendant's Subject-Matter Jurisdiction Arguments Are Unavailing
Even though Defendant's Rule 68 Offer exceeded the maximum amount that Bellino could obtain in relief, Bellino's rejection of the Rule 68 Offer does not moot her claims or the class action. A court may adjudicate only actual cases or controversies, meaning, among other requirements, that the dispute must be live. ACLU v. Clapper, No. 14-42-cv, 2015 U.S.App. LEXIS 7531, at *25-26 (2d Cir. May 7, 2015). "[A]s long as the parties have a concrete interest, however small, in the outcome of the litigation, the case is not moot." Knox v. Serv. Emps. Int'l Union Local 1000, 132 S.Ct. 2277, 2287 (2012) (alteration in original) (internal quotation marks omitted). A case becomes moot, however, if a court is powerless to "grant any effectual relief whatever to the prevailing party." Chafin v. Chafin, 133 S.Ct. 1017, 1023 (2013) (internal quotation marks omitted); cf. ABN AMRO Verzekeringen BV v. Geologistics Ams., Inc., 485 F.3d 85, 95 (2d Cir. 2007) (holding that if a court is capable of affecting the rights and obligations of the parties, a case is not moot). A case also becomes moot if intervening circumstances during the litigation remove a party's interest in its outcome. Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523, 1528 (2013).
The Second Circuit has recently held that an unaccepted Rule 68 offer alone is not a sufficient intervening circumstance to remove a plaintiff's interest in a case and render a case moot. Franco v. Allied Interstate LLC, No. 14-1464, 2015 U.S.App. LEXIS 8088, at *2 (2d Cir. May 18, 2015); Tanasi v. New Alliance Bank, No. 14-1389, 2015 U.S.App. LEXIS 7932, at *11 (2d Cir. May 14, 2015, revised May 21, 2015); McCauley v. Trans Union, L.L.C., 402 F.3d 340, 342 (2d Cir. 2005). The Second Circuit explained that when a plaintiff rejects a Rule 68 offer, a court has not entered the final judgment required to end the controversy and by extension strip the court's jurisdiction to hear the case under the Case or Controversy Clause of Article III. Tanasi, 2015 U.S.App. LEXIS 7932, at *11; Cabala v. Crowley, 736 F.3d 226, 228 (2d Cir. 2013). Dismissing a case as moot under these circumstances would be premature because a court is still able to grant relief to the parties. Genesis, 133 S.Ct. at 1533 (Kagan, J., dissenting); see also Jones-Bartley v. McCabe, Weisberg & Conway, P.C., 59 F.Supp. 3d 617, 637 (S.D.N.Y. 2014) (finding that a district court has subject-matter jurisdiction to hear a case after a plaintiff has rejected a Rule 68 Offer because a defendant has not yet satisfied a plaintiff's claim). Nevertheless, this standard supports the purpose of Rule 68 ...