United States District Court, N.D. New York
MEMORANDUM-DECISION AND ORDER
Lawrence E. Kahn U.S. District Judge
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”),
(“PHH Motion”); 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.
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. 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
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),  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.”).
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.
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.
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. ¶
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.
Subject Matter Jurisdiction
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
Failure to State a Claim
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,
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.
The Rooker-Feldman Doctrine
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
Rooker-Feldman is a narrow exception, there
are four requirements that must be met before jurisdiction ...