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Phrasavang v. Deutsche Bank

September 23, 2009

POUTH PHRASAVANG, PLAINTIFF,
v.
DEUTSCHE BANK C/O BGW ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Re Document Nos. 10, 12, 14

MEMORANDUM OPINION GRANTING OPTION ONE AND ENCORE'S PARTIAL MOTIONS TO DISMISS; GRANTING IN PART AND DENYING IN PART DEUTSCHE BANK AND SPS'S MOTION TO DISMISS; DISMISSING COUNTSII,IV AND VIIISUA SPONTE AS TO OPTION ONE; DISMISSINGCOUNTSII AND IVSUA SPONTE AS TO ENCORE

I. INTRODUCTION

This matter comes before the court on the defendants' motions to dismiss. The plaintiff, Pouth Phrasavang, owned a property located in the District of Columbia upon which defendant Deutsche Bank initiated foreclosure and eviction proceedings. The plaintiff's complaint focuses on events surrounding the loan transaction through which the plaintiff purchased the property, as well as the subsequent servicing of the loan. Defendant Encore Credit Corporation ("Encore") originated the loan secured by the property. Defendant Option One Mortgage Corporation ("Option One") was then appointed as Encore's loan servicer, followed by defendant Select Portfolio Servicing, Inc. ("SPS"). Ownership of the promissory note was then transferred to Deutsche Bank. The plaintiff seeks actual damages, punitive damages and declaratory relief under numerous legal theories discussed below.

The defendants now move to dismiss the complaint. For the reasons explained below, the court grants Encore and Option One's partial motions to dismiss, grants in part and denies in part Deutsche Bank and SPS's joint motion to dismiss and dismisses additional remaining claims contained in the plaintiff's complaint sua sponte.

II. FACTUAL & PROCEDURAL BACKGROUND

The plaintiff alleges the following facts in his complaint, which the court treats as true at this stage of the proceedings. Macharia v. United States, 334 F.3d 61, 64, 67 (D.C. Cir. 2003). On June 16, 2005, the plaintiff obtained a loan from Encore. Compl. ¶ 9. The plaintiff claims that at the closing, he was given a "pile of loan documents . . . without being given time to review them or suggest modifications." Id. ¶ 11. As a result of his inability to review the documents, the plaintiff asserts, he entered into a "sub-prime adjustable rate mortgage." Id. ¶ 12. In addition, the plaintiff alleges that Encore failed to make numerous disclosures it was required to make. Id. ¶ 14. At some point following the closing, Option One became the servicer of the loan. Id. ¶ 23. That company, the plaintiff claims, did "not take [the loan] instruments in good faith." Id. ¶ 27. The loan was later transferred to SPS, a fact of which the plaintiff claims he was not notified. Id. ¶ 28. Eventually, Deutsche Bank instituted foreclosure and eviction proceedings in the Landlord/Tenant division of the Superior Court of the District of Columbia. Id. ¶ 29.

The plaintiff alleges that the defendants defrauded him by not crediting his payments, incorrectly calculating the interest on the loan and erroneously debiting fees from his payments. Id. ¶ 24. These miscalculations, the plaintiff claims, gave rise to the determination that he had defaulted on his loan obligations and that his property should be foreclosed upon. Id. ¶ 25. Furthermore, the plaintiff alleges that the defendants knew that the accounting for the loan was inaccurate. Id.

The plaintiff commenced this action in the Superior Court of the District of Columbia on November 14, 2008, and the action was timely removed to this court on January 12, 2009. See generally Compl. The complaint alleges violations of the Home Ownership Equity Protection Act ("HOEPA"), 15 U.S.C. §§ 1639 et seq., the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601 et seq., the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq., the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 et seq., and the District of Columbia Home Loan Protection Act, D.C. Code §§ 26-1151 et seq., as well as fraudulent misrepresentation, breach of fiduciary duty, unjust enrichment and civil conspiracy. See generally Compl. Before the court are the partial motions to dismiss filed by Option One and Encore, a joint motion to dismiss filed by Deutsche Bank and SPS and the plaintiff's oppositions thereto. The court now turns to the defendants' motions.

III. ANALYSIS

A. Legal Standard for a Motion to Dismiss Pursuant to Rule 12(b)(1)

Federal courts are courts of limited jurisdiction and the law presumes that "a cause lies outside this limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938); see also Gen. Motors Corp. v. Envtl. Prot. Agency, 363 F.3d 442, 448 (D.C. Cir. 2004) (noting that "[a]s a court of limited jurisdiction, we begin, and end, with an examination of our jurisdiction").

Because "subject-matter jurisdiction is an 'Art[icle] III as well as a statutory requirement[,] no action of the parties can confer subject-matter jurisdiction upon a federal court.'" Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003) (quoting Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxite de Guinea, 456 U.S. 694, 702 (1982)). "A claim that the court lacks jurisdiction under Article III of the Constitution may not be waived, since the jurisdiction at issue goes to the foundation of the court's power to resolve a case, and the court is obliged to address it sua sponte." Doe ex rel. Fein v. District of Columbia, 93 F.3d 861, 871 (D.C. Cir. 1996). The plaintiff bears the burden of establishing that the court has subject-matter jurisdiction. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).

Because subject-matter jurisdiction focuses on the court's power to hear the claim, however, the court must give the plaintiff's factual allegations closer scrutiny when resolving a Rule 12(b)(1) motion than would be required for Rule 12(b)(6) motion for failure to state a claim. Macharia, 334 F.3d at 64, 69; Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001). Moreover, the court is not limited to the allegations contained in the complaint. Hohri v. United States, 782 F.2d 227, 241 (D.C. Cir. 1986), vacated on other grounds, 482 U.S. 64 (1987). Instead, to determine whether it has jurisdiction over the claim, the court may consider materials outside the pleadings. Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992).

B. Legal Standard for a Motion to Dismiss Pursuant to Rule 12(b)(6)

A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). The complaint need only set forth a short and plain statement of the claim, giving the defendant fair notice of the claim and the grounds upon which it rests. Kingman Park Civic Ass'n v. Williams, 348 F.3d 1033, 1040(D.C. Cir. 2003) (citing FED. R. CIV. P. 8(a)(2) and Conley v. Gibson, 355 U.S. 41, 47 (1957)). "Such simplified notice pleading is made possible by the liberal opportunity for discovery and the other pre-trial procedures established by the Rules to disclose more precisely the basis of both claim and defense to define more narrowly the disputed facts and issues." Conley, 355 U.S. at 47-48 (internal quotation marks omitted). It is not necessary for the plaintiff to plead all elements of his prima facie case in the complaint, ...


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