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Figueroa v. HSBC Bank USA, N.A.

United States District Court, N.D. New York

March 29, 2017

HSBC BANK USA, N.A., et al., Defendants.


          Lawrence E. Kahn U.S. District Judge


         Pro se plaintiff Betsy Figueroa sued Defendants HSBC Bank USA, N.A., PHH Mortgage, and Mortgage Electronic Registration Systems, Inc. (“MERS”), alleging several violations of federal law and a state-law fraud claim, all stemming from a mortgage on Figueroa's home. Dkt. No. 1 (“Complaint”) ¶¶ 1-2, 15-18, 37-83. Defendants responded to the Complaint by moving to dismiss, both for lack of subject matter jurisdiction and for failure to state a claim. Dkt. Nos. 9 (“HSBC Motion”), [1] 20 (“PHH Motion”);[2] see also Dkt. Nos. 9-10 (“HSBC Memorandum”), 22 (“PHH Memorandum”). Figueroa did not respond to the motions. Docket; see also Dkt. Nos. 25, 27 (collectively, the “Letter Motions”) (requesting dismissal of this case due to Figueroa's failure to respond). For the following reasons, Defendants' motions are granted and Figueroa's Complaint is dismissed, but she may move to amend her Complaint in accordance with this Memorandum-Decision and Order.


         Figueroa's Complaint concerns a parcel of property located in Albany, New York. Compl. ¶¶ 1-2. In 2006, Figueroa took out a mortgage on the property from HSBC (or more specifically, its predecessor, HSBC Mortgage Corporation). Id. ¶¶ 15, 18. In 2013, HSBC initiated foreclosure proceedings against Figueroa in New York state court, which granted summary judgment for HSBC. Id. ¶¶ 19-20.[3] According to Figueroa, this foreclosure action was “faulty, ” id. ¶ 19, presumably because of Defendants' improper behavior, see, e.g., id. ¶¶ 73-74 (“Defendant HSBC made a false representation . . . . Plaintiff was never notified of a change in the Loan, and operated under the premise . . . that her Loan and Mortgage remained vested within HSBC and would not be subject to a PHH serving agreement.”).

         On July 20, 2016, Figueroa filed her Complaint in this Court. Compl. While she claims federal jurisdiction due to diversity of citizenship, id. ¶ 11 (citing 28 U.S.C. § 1332), [4] it is clear from the face of the Complaint that federal question jurisdiction exists in this case, see id. ¶¶ 37-64 (alleging violations of the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601 et seq., and the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601 et seq.); 28 U.S.C. § 1331 (“The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.”).

         Figueroa's first claim is that HSBC violated TILA by failing to disclose information concerning her mortgage. Compl. ¶¶ 37-42. According to Figueroa, HSBC “failed to include and disclose certain charges” in its disclosures, id. ¶ 37, causing the settlement statement to “list[] [an] amount financed which is different from the sum listed in the original Note, ” id. ¶ 38. Figueroa also claims that the loan's annual percentage rate (or APR) was “based upon improperly calculated and disclosed amounts.” Id. ¶ 39. As a consequence, Figueroa claims a violation of TILA and its implementing regulation, and seeks both damages from HSBC and the rescission of her mortgage transaction. Id. ¶ 40; id. at 12. Also, because Figueroa first learned of these issues in February 2016, she claims that “[a]ny applicable statute of limitations should run from this date.” Id. ¶ 42.

         Figueroa's second claim accuses PHH of violating RESPA, both concerning the amount it charged her in connection with the origination of her mortgage, and for failing to respond to a qualified written request (“QWR”) for information concerning her loan. Id. ¶¶ 44, 47-48. As to the first issue, Figueroa alleges that “PHH accepted charges for the rendering of real estate services which were in fact charges for other than services actually performed, ” which in turn entitles her to treble damages. Id. ¶¶ 44-45 (citing 12 U.S.C. § 2607(d)(2)). On the second issue, Figueroa claims she “submitted a timely Qualified Written Request” to PHH-the servicer of her loan-“on or about March 31, 2016.” Id. ¶ 47. The QWR was not acknowledged within the time permitted by law, id. ¶¶ 48-50, entitling Figueroa to actual damages, statutory damages, and other recovery, id. ¶¶ 51, 56-58. Figueroa also claims that the statute of limitations should run only from April 2016, the date she “first learned of the actions of Defendants.” Id. ¶ 64. The Complaint, however, does not include any further details about the QWR or any allegations concerning PHH's broader QWR practices. Id. ¶¶ 43-64.

         Finally, Figueroa alleges a state law claim for fraudulent misrepresentation against all Defendants. Id. ¶¶ 65-83. Reading the Complaint liberally, it seems to allege a fraud based on HSBC's failure to disclose that the loan would be serviced by PHH. Id. ¶¶ 73-74. As a consequence, Figueroa “was never notified of a change in the Loan, ” and was accordingly forced “to make payments to a non-party to the Mortgage.” Id. ¶ 77. Though the connection is unclear, Figueroa alleges that this fraud led to the “entry of judgment . . . against her in the State Court proceedings, ” in turn causing the imminent loss of her home. Id. ¶ 78. She also “was further harmed in having to defend the State Court action, ” including legal and other costs. Id. ¶ 80.

         Before the Court now are Defendants' motions to dismiss. HSBC Mot.; PHH Mot. Both motions argue that Figueroa's claims (or at least some of them) are barred by the Rooker-Feldman doctrine, which prohibits state-court losers from challenging the judgments against them in federal court. HSBC Mem. at 4-7; PHH Mem. at 5-7. Both also argue that Figueroa's claims are time barred or that her Complaint otherwise fails to state a claim under Rule 12(b)(6). HSBC Mem. at 11-19; PHH Mem. at 8-15. HSBC further argues that Figueroa's claims are barred by claim preclusion from the state-court foreclosure action, as well as by her execution of a modification to her loan. HSBC Mem. at 7-10.


         A. Subject Matter Jurisdiction

         A fundamental predicate to judgment in the federal courts is the existence of subject matter jurisdiction. “Dismissal of a case for lack of subject matter jurisdiction . . . is proper ‘when the district court lacks the statutory or constitutional power to adjudicate it.'” Ford v. D.C. 37 Union Local 1549, 579 F.3d 187, 188 (2d Cir. 2009) (per curiam) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). A lack of subject matter jurisdiction cannot be waived, and may be raised by motion or sua sponte at any time. E.g., Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 107 (2d Cir. 1997); see also Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”). The party asserting subject matter jurisdiction carries the burden of proving its existence by a preponderance of the evidence. E.g., Makarova, 201 F.3d at 113; Augienello v. FDIC, 310 F.Supp.2d 582, 587-88 (S.D.N.Y. 2004).

         B. Failure to State a Claim

         To survive a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, 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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A court must accept as true the factual allegations contained in a complaint and draw all inferences in favor of the plaintiff. Allaire Corp. v. Okumus, 433 F.3d 248, 249-50 (2d Cir. 2006). Plausibility, however, requires “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the alleged misconduct].” Twombly, 550 U.S. at 556. The plausibility standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). “[T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (quoting Twombly, 550 U.S. at 555). Where a court is unable to infer more than the mere possibility of the alleged misconduct based on the pleaded facts, the pleader has not demonstrated that she is entitled to relief and the action is subject to dismissal. Id. at 678-79.


         A. The Rooker-Feldman Doctrine

         The Rooker-Feldman doctrine is a narrow exception to the normal subject-matter jurisdiction of federal district courts. Named after the two Supreme Court cases that applied the principle, Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983), the doctrine prohibits losers in a state-court lawsuit from bringing a new action in federal court complaining of injuries caused by the state-court judgment itself, e.g., Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 291-92 (2005). Rooker-Feldman recognizes that district courts are courts of original jurisdiction, but a challenge to a state-court judgment is effectively an appeal, which only the Supreme Court has appellate jurisdiction over within the federal system. E.g., id. at 292; Hoblock v. Albany Cty. Bd. of Elections, 422 F.3d 77, 83-84 (2d Cir. 2005) (citing Rooker, 263 U.S. at 416).

         Because Rooker-Feldman is a narrow exception, there are four requirements that must be met before jurisdiction ...

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