United States District Court, E.D. New York
The Estate of GENNARO SALVATORE IZZO, GENNARO V. IZZO and the heirs of GENNARO SALVATORE IZZO, Plaintiffs,
VANGUARD FUNDING, LLC f/k/a FIDELITY BORROWING MORTGAGE BANKERS, URBAN FINANCIAL GROUP, INC. a/k/a URBAN FINANCIAL OF AMERICA, REVERSE MORTGAGE SOLUTIONS INC. a/k/a SECURITY ONE LENDING, MCCABE WEISBERG & CONWAY, P.C., NATALIE GIRALDO, ESQ., DEANA CHELI, ESQ., TERRANCE J. MCCABE, ESQ., MARC S. WEISBERG, ESQ., EDWARD D. CONWAY, ESQ., LISA L. WALLACE, ESQ., LAURA H.G. SULLIVAN, ESQ., JANET Z. CHARLTON, ESQ., JOSEPH FILIPONE, RICHARD CACCIATORE, NANCY RADELMAN, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. MERS, DONNA AKINRELE, ESQ., LAURA SMITH, John Does 1-10 and Jane Does 1-10, which Doe defendants are not now known to the plaintiffs who played a roles on the affairs of the enterprise and participated in the operation and/or management of the enterprise, Defendants.
A. Bythewood, Esq. Attorney for the Plaintiffs
Westerman Ball Ederer Miller & Sharfstein LLP Attorneys
for the Defendants Vanguard Funding, LLC f/k/a Fidelity
Borrowing Mortgage Bankers; Joseph Filipone; and Richard
Cacciatore By: Richard F. Harrison, Esq., Of Counsel
Such & Crane, LLP Attorneys for the Defendants Urban
Financial Group, Inc. a/k/a Urban Financial of America;
Reverse Mortgage Solutions a/k/a Security One Lending;
Mortgage Electronic Registration Systems, Inc. (MERS); and
Laura Smith By: Andre S. Haynes, Esq., Of Counsel
Weisberg & Conway, PC Attorneys for the Defendants McCabe
Weisberg & Conway, PC; Natalie Giraldo, Esq.; Deanne
Cheli, Esq.; Terrance J. McCabe, Esq.; Marc S. Weisberg,
Esq.; Edward D. Conway, Esq.; Lisa L. Wallace, Esq.; Laura
H.G. Sullivan, Esq.; Janet Z. Charlton, Esq.; and Donna
Akinrele, Esq. By: Kiyam J. Poulson, Esq., Of Counsel
MEMORANDUM OF DECISION & ORDER
D. SPATT United States District Judge
December 11, 2015, the Estate (the “Estate”) of
Gennaro S. Izzo (the “Decedent”), by its Executor
Gennaro V. Izzo (“G.V. Izzo”), on its own behalf
and on behalf of unnamed heirs (collectively, the
“Plaintiffs”), commenced this action against the
Defendants, alleging violations of the Racketeer Influenced
and Corrupt Organizations Act (“RICO”), 18 U.S.C.
§ 1961 et seq.; the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692
et seq.; the Truth in Lending Act
(“TILA”), 15 U.S.C. § 1601 et seq.,
and its implementing regulations, namely, 12 C.F.R. §
266.33; the federal regulations pertaining to the Home Equity
Conversion Mortgage statute, namely, 24 C.F.R. § 206;
and multiple theories of New York statutory and common law
2, 2016, the Court dismissed the complaint for failing to
comply with Federal Rule of Civil Procedure (“Fed. R.
Civ. P.”) 8 and granted the Plaintiffs leave to
replead. See Estate of Izzo v. Vanguard Funding,
LLC, No. 15-cv-7084, 2016 U.S. Dist. LEXIS 86567
(E.D.N.Y. July 2, 2016) (Spatt, J.).
25, 2016, the Plaintiffs filed an amended complaint.
before the Court is a series of motions seeking to dismiss
the amended complaint.
on August 2, 2016, the Defendants Vanguard Funding, LLC,
formerly known as Fidelity Borrowing Mortgage Bankers
(“Vanguard”); Joseph Filipone
(“Filipone”); and Richard Cacciatore
(“Cacciatore, ” together with Vanguard and
Filipone, the “Vanguard Defendants”) renewed an
earlier-filed motion to dismiss the pleading under
Fed.R.Civ.P. 12(b)(1) and 12(b)(6), on the grounds that
federal subject matter jurisdiction is lacking and that the
amended complaint fails to state a claim for relief.
See Docket Entry (“DE”) [74, 94].
August 15, 2016, the Defendants Urban Financial Group, Inc.
a/k/a Urban Financial of America (“Urban
Financial”); Reverse Mortgage Solutions a/k/a Security
One Lending (“Security One”); Mortgage Electronic
Registration Systems, Inc. (“MERS”); and Laura
Smith (“Smith, ” together with Urban Financial,
Security One, and MERS, the “Urban Defendants”)
filed a motion to dismiss under Rule 12(b)(6), contending
that the amended complaint fails to state a claim for relief.
See DE .
August 15, 2016, the Defendants McCabe Weisberg & Conway,
PC (the “McCabe Law Firm”); Natalie Giraldo, Esq.
(“Giraldo”); Deanne Cheli, Esq.
(“Cheli”); Terrance J. McCabe, Esq.
(“McCabe”); Marc S. Weisberg, Esq.
(“Weisberg”); Edward D. Conway, Esq.
(“Conway”); Lisa L. Wallace, Esq.
(“Wallace”); Laura H.G. Sullivan, Esq.
(“Sullivan”); Janet Z. Charlton, Esq.
(“Charlton”); and Donna Akinrele, Esq.
(“Akinrele, ” together with the McCabe Law Firm,
Giraldo, Cheli, McCabe, Weisberg, Conway, Wallace, Sullivan,
Charlton, and Akinrele, the “Law Firm
Defendants”) filed a motion to dismiss under Rule
12(b)(6) on the ground that the amended complaint fails to
state a claim for relief. See DE .
reasons that follow, the Court grants the Defendants'
motions to dismiss as to the federal claims over which the
Court has original jurisdiction, and declines to exercise
supplemental jurisdiction over the remaining state law causes
where otherwise noted, the facts are drawn from the amended
complaint and construed in favor of the Plaintiffs.
as cautioned in the Court's July 2, 2016 Decision &
Order; and consistent with controlling authority regarding
the form and content of pleadings, in considering these
motions the Court has disregarded the abundance of conclusory
and argumentative allegations, as well as all other
non-factual content contained in the amended complaint.
See Ashcroft v. Iqbal, 556 U.S. 662, 664, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009).
Court has found that after setting aside this surplussage,
few well-pled facts remained.
in its discretion, the Court has also relied on the extrinsic
evidence submitted by the parties to aid in its understanding
of the underlying facts. In particular, the Court has
reviewed and considered relevant hospital records; mortgage
documents which form the heart of the Plaintiffs'
complaint; and publicly-available court filings in a related
foreclosure action, all of which were either appended to the
original complaint, or incorporated by reference and relied
upon by the Plaintiffs in framing the amended complaint.
See Goel v. Bunge, Ltd., 820 F.3d 554, 558-59 (2d
The Relevant Facts
April 26, 2011, the Decedent, then 80 years old, was admitted
to South Nassau Communities Hospital. Admission records
reflect that, at the time of the Decedent's arrival,
hospital personnel were unable to ascertain his symptoms due
to “AMS, ” which is sometimes shorthand for
“altered mental state.” However, according to the
amended complaint, at the time of his admission, the
Defendant suffered from numerous ailments that left him
immobile, confined to his bed, and unable to speak. For
months, he had been under round-the-clock medical care.
morning after his admission, on April 27, 2011, at
approximately 7:30 A.M., an attending physician at the
hospital signed a form attesting to the fact that, due to
“Dementia, ” the Decedent lacked the capacity to
make vital medical decisions, such as whether to resuscitate
him or withdraw him from life support in the case of an
April 29, 2011, at 6:30 P.M. a second licensed practitioner
signed the same form, concurring with the prior assessment of
the Decedent's capacity.
of the Decedent's condition, his son, G.V. Izzo, was
identified as the Decedent's surrogate health care
it appears that the Decedent never left the hospital. A death
certificate shows that on May 7, 2011, at 9:30 A.M., he died
of acute respiratory failure, secondary to bronchopneumonia
and myelodysplastic syndrome.
gravamen of this case involves certain acts attributed to the
Decedent during the period of time, immediately preceding his
death, when the staff at South Nassau Communities Hospital
apparently believed he was incapacitated. Specifically, the
record contains documentation purportedly reflecting a
reverse mortgage transaction between the Decedent and the
Defendant Vanguard on April 30, 2011.
regard, the record includes a Home Equity Conversion Fixed
Rate Note (the “Note”), which, in turn,
references a Home Equity Conversion Loan Agreement (the
“Loan Agreement”). Apparently, under the terms of
the Loan Agreement, Vanguard agreed to make capital advances
totaling $570, 000 to the Decedent, which the Decedent
obligated himself to repay, with interest, by executing the
record also includes a Fixed Rate Home Equity Conversion
Mortgage (the “Mortgage”), pursuant to which the
Decedent apparently pledged his home at 121 Oak Street in
Lynbrook (the “Lynbrook Property”) as collateral
to secure repayment of the Note. Relevant here, Section 9(a)
of the Mortgage provides that Vanguard may accelerate the
debt and require immediate payment-in-full of the Note upon
the Decedent's death, so long as none of his heirs
continues utilizing the Lynbrook Property as his or her
Court further notes that, although the Mortgage identifies
Vanguard as the lender, the Mortgage was issued to the
Defendant MERS, in the capacity of “nominee” - an
apparently administrative title - for Vanguard.
prime importance, each of these documents was purportedly
signed by the Decedent on April 30, 2011. However, in this
lawsuit, the Plaintiffs allege that the Decedent's
signature was forged in all cases.
document was also purportedly witnessed by the Defendants
Filipone and Cacciatore, as agents for Vanguard, and
notarized by the Defendant Nancy Radelman
(“Radelman”) on the same date, namely, April 30,
means not specified in the amended complaint or supporting
materials, it appears that sometime between May 7, 2011 and
August 29, 2011, Urban Financial received notice of the
on August 29, 2011, the Default Department at Urban Financial
sent a letter to G.V. Izzo stating, in pertinent part, the
We would like to extend our condolences for your loss. Thank
you for keeping us informed on the status of the [Lynbrook]
property. If you have not already done so, please forward a
copy of the death certificate and proof of probate documents
as soon as possible for our file.
There will be no further advances made from the account.
However, please be aware that Interest and Service Fees will
continue to accrue until the mortgage is paid in full. It is
in the best interest of the estate to repay the loan as soon
as possible. The taxes and homeowners insurance must be
current and are the responsibility of the estate. We will
need the executor/administrator of the estate to provide us
with the estate tax identification number for IRS reporting
As of 8/29/11, the amount required to payoff the loan balance
in full by 9/28/11 is $271, 186.46. If you believe that this
figure is more than the value of the property, it is your
responsibility to arrange for an appraisal at your expense.
not clear what interest Urban Financial had in the Mortgage
at the time it sent the August 29, 2011 letter. In fact, it
was not until two years later, on September 27, 2013, that
the original mortgagee, MERS, assigned its interest in the
Mortgage to Urban Financial by way of a written Assignment of
Mortgage (the “Assignment”). The Defendant Laura
Smith, in her capacity as an Assistant Vice President of
MERS, executed that Assignment on behalf of the company.
also not clear how any of these entities actually learned of
the Decedent's death. Even viewed in the Plaintiffs'
favor, the August 29, 2011 letter would appear to support the
inference that G.V. Izzo acknowledged the existence of the
Note and Mortgage, and duly advised the lender of his
father's death. While generally consistent with the
Plaintiffs' allegation that G.V. Izzo handled most of his
ailing father's financial affairs, G.V. Izzo's
acknowledgment of the Note and Mortgage would seem to
contradict the Plaintiffs' core allegation that the
Decedent's signature was forged by Vanguard and its
agents, thereby rendering the transaction invalid.
event, on or about February 20, 2014, Urban Financial, as the
assignee of the Mortgage, commenced a foreclosure action in
the New York Supreme Court for Nassau County (the
“Foreclosure Action”), naming as a Defendant G.V.
Izzo, in his capacity as the Executor of the Decedent's
Estate. Relevant here, the Summons and Complaint were signed
by the individual Defendant Natalie Giraldo of the McCabe Law
Firm, as counsel for Urban Financial. A related Notice of
Pendency, also signed by Giraldo, was filed against the
Lynbrook Property the same day.
general, the complaint in the Foreclosure Action alleged that
the Decedent's Estate had been in default under the Note
and Mortgage since at least May 7, 2011.
of service indicate that, on February 28, 2014, personal
service of the Summons and Complaint in the Foreclosure
Action was made on G.V. Izzo at his home at 12 Allen Street
in Lynbrook. On March 6, 2014 and March 21, 2014,
respectively, an additional copy of the Summons and the
typewritten notice of foreclosure required by Section 1303 of
the New York Real Property Actions and Proceedings Law were
mailed to G.V. Izzo at his home address.
G.V. Izzo failed to answer or otherwise appear in the
Foreclosure Action, on January 7, 2015, Urban Financial filed
a motion for a default judgment and appointment of a referee
to compute the amounts due to Urban Financial under the Note
and Mortgage. The motion papers were signed by the individual
Defendant Donna Akinrele of the McCabe Law Firm, as counsel
for Urban Financial.
motion was apparently supported with an affidavit by Laura
Smith, which does not appear to be a part of the current
12, 2015, Justice Thomas A. Adams of the State Supreme Court
signed an Order of Reference, finding G.V. Izzo in default
and referring the Foreclosure Action to Referee Michael
Annibale, Esq. for a computation of damages.
to this order, on or about October 9, 2015, Smith submitted a
second affidavit, this time attesting to the amounts claimed
to be due and owing by the Estate to Urban Financial.
Court pauses to note that Smith's role in these
underlying events is somewhat unclear. As noted above, on
September 27, 2013, acting in the capacity of Assistant Vice
President of MERS, Smith executed the Assignment of the
Mortgage in favor of Urban. However, it appears that she may
have been on both sides of the transaction, as she continued
signing pertinent documentation after the Assignment in a
different capacity, namely, as an Assistant Vice President of
the Defendant Security One, which, in turn, was assertedly
acting as the attorney-in-fact for Urban Financial.
event, on November 6, 2015, Referee Annibale issued a report,
finding that, as of August 20, 2015, the sum of $389, 370.57
was owed to Urban Financial under the Note and Mortgage,
together with various expenses, attorneys' fees, and