United States District Court, District of Columbia
ROSEMARY M. COLLYER, UNITED STATES DISTRICT JUDGE
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.
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.
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. 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),
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. 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
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
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.
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.
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.
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.
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 ...