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Ford v. SunTrust Mortgage

United States District Court, District of Columbia

October 20, 2017

DELORES FORD, et al., Plaintiffs,
SUNTRUST MORTGAGE, et al., Defendants.



         Plaintiffs Delores Ford, Alice Freeman, Henry Khanagara, Bettye Tate, Deborah Johnson, and Darrell Johnson sue Defendants, a collection of financial institutions associated with mortgage lending. In their Complaint [Dkt. 1] (the Original Complaint or Orig. Compl.), Plaintiffs allege a basket of both federal and state law claims, which Defendants have moved to dismiss. In response, Plaintiffs have moved for leave to amend their Original Complaint. Defendants have, in turn, opposed Plaintiffs' motion, arguing that the proposed amendments to Plaintiffs' Complaint would be futile.

         The Court addresses both Defendants' motions to dismiss and Plaintiffs' motion to amend. Because Plaintiffs' Original Complaint suffers from fatal defects of pleading, and because the same defects remain in Plaintiffs' proposed Amended Complaint, the Court will deny Plaintiffs' Motion to Amend as futile and grant Defendants' respective Motions to Dismiss.

         I. BACKGROUND

         A. Facts

         Plaintiffs are all residents of Washington, D.C., who individually took out mortgages for specific properties throughout Washington, D.C. at various times between the years 1989 and 2008.[1] Plaintiffs allege in their proposed Amended Complaint that they are “the purchaser[s] of residential mortgage-backed securit[ies]” for their respective properties. See Proposed Amended Complaint (Amended Complaint or Am. Compl.) [Dkt. 27-4] ¶¶ 1-5. Defendants Suntrust Bank, Inc. (Suntrust), [2] Bank of America, N.A. (Bank of America), and Network Funding, L.P. (Network), are all mortgage underwriters who individually underwrote Plaintiffs' respective loans. Id. ¶¶ 12-16. Save Darrell and Deborah Johnson, no Plaintiff acted in concert with any other Plaintiff in taking out their mortgages, and none of the Defendants co-underwrote any mortgage loan.[3] In other words, beyond the fact that all Plaintiffs took out mortgages, and all Defendants are mortgage underwriters, no interrelationship or common factual circumstance exists between them.

         While Plaintiffs' Original Complaint and Amended Complaint are both short on specifics, the crux of their collective allegations is that Defendants, through their procedures in repackaging and securitizing Plaintiffs' mortgage loans, violated certain terms and warranties contained in their agreements with Plaintiffs and made material false representations to Plaintiffs. In neither the Original Complaint nor the Amended Complaint do Plaintiffs identify with particularity which terms were allegedly broken by each Defendant or what specific statements were allegedly made. Plaintiffs do allege that each Deed of Trust was notarized by a notary with an expired commission, although it remains unclear whether those notaries were employees or agents of Defendants, or if Defendants were aware that the commissions were expired.

         B. Procedural History

         Plaintiffs filed their Original Complaint on January 1, 2017. Defendants submitted individual Motions to Dismiss. See Bank of America Mot. to Dismiss (Bank of America MTD) [Dkt. 7]; Network Funding Mot. to Dismiss (Network MTD) [Dkt. 11]; Suntrust Mot. to Dismiss (Suntrust MTD) [Dkt. 16]. Plaintiffs submitted responses to these motions, see Pls.' Opp'ns [Dkts. 18 and 19] and moved to amend their Complaint, see Pls.' 1st Mot. to Amend [Dkt. 21].

         Because Plaintiffs failed to attach their proposed Amended Complaint to this first motion, in violation of this District's Local Rules, the Court denied Plaintiffs' motion without prejudice. See 6/30/2017 Minute Order. On July 22, 2017, Plaintiffs then filed a second Opposition to Defendants' respective Motions to Dismiss, which included an attached proposed Amended Complaint, and which the Court therefore construes as a second Motion to Amend. See 2d Mot. to Amend [Dkt. 27]. All three Defendants opposed this renewed Motion to Amend, see Bank of America Mem. in Opp'n [Dkt. 29]; Suntrust Mem. in Opp'n [Dkt. 30]; Network Mem. in Opp'n [Dkt. 31]. To date, Plaintiffs have filed no reply.

         In their Original Complaint, Plaintiffs allege three separate claims against all Defendants: (1) Civil Penalties for False Statements Within Jurisdiction of United States, (18 U.S.C. § 1001 (2012)), in violation of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), 12 U.S.C. § 1833a; (2) Civil Penalties for False Statements to Financial Institutions (18 U.S.C. § 1014), also in violation of FIRREA; and (3) Breach of Contract. See Orig. Compl. at 14-15.[4]

         In their Amended Complaint, Plaintiffs retain both the Original Complaint's first FIRREA claim and the breach of contract claim. They replace the Original Complaint's second FIRREA claim with a state law negligent misrepresentation claim, and add no additional claims. See Am. Compl. at 6-7. While neither the Original Complaint nor the Amended Complaint specifies under which state law Plaintiffs bring their breach of contract and negligent misrepresentation claims, Plaintiffs are all residents of the District of Columbia and the events giving rise to this suit substantially occurred in the District of Columbia. See Compl. ¶ 7. Therefore the Court will apply D.C. law to these claims.


         While Defendants do not challenge jurisdiction, it is incumbent on the Court to verify its jurisdiction. Relying on their FIRREA claims, Plaintiffs claim jurisdiction under 18 U.S.C § 1331, federal question. “[T]he vast majority of cases brought under the general federal- question jurisdiction of the federal courts are those in which federal law creates the cause of action.” Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 808 ...

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