November 22, 2013

United States District Court Dismisses Plaintiff’s Intentional Misrepresentation and Negligent Misrepresentation Claims

By Ebube Okoli

The court in Hoffman v. Goldman, Sachs & Co., 2013 U.S. Dist. LEXIS 155092, 2013 WL 5797623 (D. Nev. Oct. 28, 2013) dismissed both of the plaintiff’s intentional misrepresentation and negligent misrepresentation claims.

Plaintiffs asserted two claims in their complaint: intentional misrepresentation and negligent misrepresentation. In regards to the first claim, the court found that the plaintiffs’ claim for the misrepresentation failed because it was not pled with specificity as required by Rule 9(b). Nowhere in the complaint did plaintiffs allege who made the fraudulent statements, when the statements were made, or where they were made.

Plaintiffs failed to allege the specific content of the fraudulent statements—their allegations include only broad generalizations. Plaintiffs also failed to identify precisely what reliance they placed on the “misrepresentations” such that plaintiffs are entitled to damages or equitable relief.

Lastly, the court found that the plaintiffs also nakedly assert a claim for “negligent misrepresentation,” and that the claim suffered from the same deficiencies as the first claim.

November 22, 2013 | Permalink | No Comments

United States District Court Grants Defendant’s Motion to Dismiss Plaintiff’s TILA, RESPA, and GLBA Claims

By Ebube Okoli

The court in deciding Hopkins v. Green Tree Servicing, LLC, 2013 U.S. Dist. LEXIS 155547, 2013 WL 5888086 (D. Md. Oct. 30, 2013) granted defendant’s motion to dismiss plaintiff’s TILA, RESPA, and GLBA claims.

Plaintiff referenced three statutes in their complaint: TILA, RESPA, and GLBA. Plaintiff alleged that the defendant violated TILA by “withholding certain disclosures and documentation.” Plaintiff also claimed that defendant violated RESPA by making “loan servicing errors.” Plaintiff, however, did not state which provisions of these statutes defendant violated. With regard to the GLBA, Plaintiff alleged neither how defendant violated the statute, nor which provision defendant violated.

Accordingly, the defendant alleged that the plaintiff’s complaint failed to meet the pleading requirements set forth in Fed. R. Civ. P. 8, and the complaint did not include any of the basic information necessary to be properly considered a complaint. Defendant also claimed that plaintiff’s complaint contained none of the information required by Rule 8(a). Specifically, with regard to Rule 8(a)(2)‘s requirement of “a short and plain statement of the claim showing the pleader is entitled to relief.”

The defendant claimed that the plaintiff’s complaint was nothing more than an unadorned collection of vague and conclusory statements, in which the plaintiff failed to plead any specific facts supporting the claim that Green Tree somehow violated the law. Additionally, defendant argued that plaintiff failed to identify a single provision of RESPA and TILA that Green Tree allegedly violated. The court agreed and dismissed the plaintiff’s complaint.

November 22, 2013 | Permalink | No Comments

November 21, 2013

United States District Court Dismisses Plaintiff’s Wrongful Foreclosure, Wrongful Ejectment, and Quiet Title Claims

By Ebube Okoli

The court in deciding Billete v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. LEXIS 155544, 2013 WL 5840105 (D. Haw. Oct. 30, 2013) dismissed with prejudice the portions of plaintiff’s actions, including: Count I (wrongful foreclosure, wrongful ejectment, and quiet title), Count III (fraud), and Count V (unfair and deceptive acts and practices) based upon the closure of Deutsche Bank’s trust, to which MERS purportedly assigned plaintiffs’ loan, and any other alleged violations of the Trust’s Pooling and Servicing Agreement (“PSA”).

The court granted in part and denied in part Deutsche Bank’s motion to dismiss plaintiff’s complaint. Specifically, the defendant’s motion was denied as to the portions of Amended Counts I, III, and V based on the assertion that the assignment was invalid because HCL was dissolved prior to the assignment.

Further, the defendant’s motion regarding the portions of the plaintiffs’ claims that alleged that the foreclosure was invalid because Deutsche Bank failed to comply with Haw. Rev. Stat. § 667-5 were denied without prejudice.

November 21, 2013 | Permalink | No Comments

And How About the Just?

By David Reiss

Some believe that there are 36 righteous people whose existence justifies the whole of humanity.  Each bears the world’s pain and the world would come to an end without these Just ones. Oddly enough, I was thinking about this story when reading about the the JPMorgan Chase settlement with the Department of Justice.

I was glad to see that the company was being held accountable for its behavior (the Statement of Facts outlines the basis for the settlement).  I was also glad to see that Justice is not giving a free pass to the individuals who may be individually guilty of wrongdoing. The settlement does not bar future prosecutions and Justice seems energized to hold individuals accountable for their intentional and wrongful acts that contributed to the financial crisis. These actions by Justice will hopefully deter some potential wrongdoers going forward.

But what is missing from all of this allocating of responsibility is an acknowledgment that some people in these financial institutions tried to do the right thing. They tried to underwrite mortgages properly; they tried to rate securities properly; they tried to follow established due diligence procedures. These people were overrun by their superiors who were chasing short term profits for their employers and bigger annual bonuses for themselves. Some of these Financial Industry Just were fired, some retired, some moved on.

How might the FI Just view their actions so many years later? Their supervisors likely received large bonuses and promotions and very few of them will be held responsible for their bad acts. The FI Just, on other other hand, got harsh words, poor treatment and relatively poor compensation for their troubles.

Just as we want to disincentivize bad behavior, we should also seek to incentivize good behavior. This does not necessarily require financial compensation. For many people, an acknowledgement of their good judgment might be enough. Is there a role for government in such an initiative? Can their be a medal for financial rectitude; an honor roll for underwriting: a listing of the Just by Justice?


November 21, 2013 | Permalink | No Comments

November 20, 2013

Reiss on $13B JPMorgan Settlement in CSM

By David Reiss

The Christian Science Monitor quoted me in JPMorgan Chase settles. Is $13 billion for role in mortgage crisis fair? The story reads in part,

The settlement does not, however, release any individuals within JPMorgan from further criminal or civil charges. The bank has agreed to cooperate fully in any investigations related to the fraud covered in the agreement.

“I think that the Department of Justice has heard the public in terms of saying, if people were criminally responsible, they should be held liable,” says David Reiss, a professor at Brooklyn Law School, who has written extensively on the mortgage crisis. “Just a handful of people have faced any serious personal liability as a result of the events of the financial crisis of the 2000s.”

But some feel that the unprecedented scope and size of the penalty is unfair for the bank behemoth, which was seen as something of a financial savior when it took on the imploding assets of Bear Stearns and Washington Mutual after the financial collapse. Some estimate that employees at these banks conducted up to 80 percent of the fraud found by the Justice Department. JPMorgan assumed these firms’ legal jeopardy when it took on their troubled assets.

“There’s a moral narrative about this, that it’s unfair to go after JPMorgan because they stepped in to help,” says Mr. Reiss.

November 20, 2013 | Permalink | No Comments

November 19, 2013

California Court Determines Plaintiff’s Claims are Barred by Res Judicata

By Ebube Okoli

The court in deciding Maxwell v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. LEXIS 155930, 2013 WL 5882457 (N.D. Cal. Oct. 30, 2013) concluded that the plaintiff’s claims were barred by res judicata and therefore granted [with prejudice] the defendant’s motion to dismiss.

Plaintiffs brought this action against defendants Deutsche, OneWest, and MERS. Plaintiff alleged various violations of California and federal consumer protection statutes. The plaintiff asserted a claim for an invalid transfer of a trust deed, and sought declaratory and injunctive relief.

The defendants moved to dismiss the proceedings, arguing that the claims were barred by res judicata. The court, after considering the evidence presented, concluded that the plaintiff’s claims were barred by res judicata. Accordingly, the court granted the defendant’s motion to dismiss.

November 19, 2013 | Permalink | No Comments

Northern District of California Court Dismisses Plaintiff’s Claims for Lack of Subject Matter Jurisdiction

By Ebube Okoli

The court in deciding Murphy v. Bank of N.Y. Mellon, 2013 U.S. Dist. LEXIS 155923, 2013 WL 5883675 (N.D. Cal. Oct. 29, 2013) dismissed the plaintiff’s action without prejudice.

The plaintiff in this case brought this action against defendants [Bank of New York Mellon and MERS] for (1) violations of 18 U.S.C. § 1001; (2) violations of 18 U.S.C. § 1341; (3) violations of the Fair Debt Collection Practices Act (“FDCPA”); (4) violations of California’s Business and Professions Code Section 17200; (5) slander of title; (6) cancellation of void instruments; (7) quiet title; and (8) wrongful foreclosure. Compl., ECF No. 1.

The plaintiff’s complaint revolved around the main theory that the defendants lacked the authority to execute any foreclosure proceedings. After considering the plaintiff’s arguments, the court first concluded that the plaintiff’s action must be dismissed for lack of subject matter jurisdiction. Second, the court found that the federal claims in the operative complaint failed as a matter of law.

November 19, 2013 | Permalink | No Comments