STEVEN D. MERRYDAY, District Judge.
A decade ago, the Treasury Department introduced the Home Affordable Modification Program, which allegedly requires a participating bank to use "reasonable efforts" to modify the mortgage of a person in default or reasonably likely to default.
In June 2017, Wilson Diaz and 118 other plaintiffs sued Bank of America in a single action.
Before resolving the motion to dismiss, the presiding judge observed that the complaint, which alleged neither each plaintiff's citizenship nor the amount in controversy between each plaintiff and Bank of America, failed to invoke diversity jurisdiction. (Doc. 15 in case no. 17-cv-1534) Ordered to amend the complaint to invoke diversity jurisdiction, Diaz and the other plaintiffs submitted a 403-page complaint. (Doc. 16 in case no. 17-cv-1534) For the second time, Bank of America moved to dismiss Diaz's complaint and repeated the arguments from the earlier motion. The presiding judge in that action found misjoinder, severed the plaintiffs' claims, and ordered the plaintiffs to sue separately.
The plaintiffs heeded the presiding judge's command. Between October 30, 2017, and November 3, 2017, more than a hundred plaintiffs sued Bank of America in the Middle District of Florida in eighty actions and alleged fraud under Florida common law. Excepting names, dates, addresses, and the like, the complaints are identical. The actions are distributed among eight district judges in the Middle District of Florida. In two actions, the presiding judges found the claims barred by the four-year limitation.
In Diaz's third complaint (but the first complaint in this case), Diaz alleged (Doc. 1) four misrepresentations by Bank of America. First, Bank of America allegedly failed to mention that a reasonably foreseeable danger of default might qualify a mortgagor for a modification; second, Bank of America stated that the mortgagor failed to provide Bank of America with the documents necessary to complete the modification; third, Bank of America orally notified the mortgagor that the bank approved the requested modification; and fourth, Bank of America charged a "fraudulent" inspection fee. For the third time, Bank of America moved (Doc. 12) to dismiss the complaint. Diaz has not moved at any moment in this action for leave to amend the complaint.
A February 1, 2018 order (Doc. 15) dismisses each fraud claim except the claim that Bank of America omitted to mention that a reasonably foreseeable likelihood of default might qualify a mortgagor for a modification. In this claim, Diaz alleges that Bank of America instructed him on May 17, 2011, to "refrain from making his regular mortgage payments" in order to qualify for a modification. (Doc. 1 at ¶ 37) Bank of America allegedly omitted to mention that a reasonably foreseeable likelihood of default can qualify a mortgagor for a modification. (Doc. 1 at ¶ 37) Unaware of his option not to default, Diaz allegedly "refrained from" paying his mortgage and, as a result, "fell into default status." (Doc. 1 at ¶ 39) As a "direct result" of Bank of America's alleged omission, Diaz allegedly suffered the loss of both his home and the equity in his home. (Doc. 1 at ¶ 39)
Moving (Doc. 32) for summary judgment, Bank of America observed that Diaz defaulted in November 2008, two and a half years before Bank of America's alleged omission. In response to the motion for summary judgment, Diaz tacitly conceded that he defaulted before the alleged misrepresentation, affirmed that Bank of America advised him not to cure the default, and argued that he suffered a foreclosure after relying on Bank of America's advice. Objecting to Diaz's maintaining two putatively irreconcilable sets of factual assertions (that is, "I was not in default" and "I was in default"), Bank of America replied (Doc. 40) that Diaz cannot in effect amend his complaint by responding to a motion for summary judgment with facts that conflict with the allegations in the complaint.
Identifying the discrepancy between the allegations in the complaint and the argument in the response, a June 8, 2018 order (Doc. 41) permits Diaz a final opportunity to amend the complaint to clarify the facts that substantiate the fraud claim.
In the third amended complaint (Doc. 42), Diaz tacitly concedes that he defaulted before the misrepresentation. For the fourth time, Bank of America moves (Doc. 43) to dismiss the complaint. This order will not repeat or resolve all of the arguments in the motion to dismiss, but several arguments merit discussion.
First, Bank of America argues persuasively that Rooker-Feldman bars the fraud claim.
The weight of authority strongly supports Bank of America's argument that Rooker-Feldman bars the fraud claim. In Figueroa v. Merscorp, Inc., 766 F.Supp.2d 1305 (S.D. Fla. 2011) (Altonaga, J.), aff'd, 477 Fed.Appx. 558 (11th Cir. May 11, 2012), a bank sued in state court to foreclose a mortgagor's property, and the state court entered judgment for the bank and ordered a foreclosure sale. Moving in state court to vacate the judgment, the mortgagor argued that the bank secured the foreclosure judgment through fraud. After the state court denied the motion, the mortgagor sued the bank in federal court under RICO and "[sought] damages arising out of the loss of his home." After thoroughly surveying the authority, Judge Altonaga found the claim "inextricably intertwined" with the foreclosure judgment. 766 F.Supp.2d at 1315-25. Affirming the dismissal under Rooker-Feldman, the Eleventh Circuit concluded, "The state court judgment formed the basis of or was intertwined with the injury complained of in Figueroa's instant complaint: that [Figureroa] lost his one half-interest in his property and home because of an improper foreclosure proceeding." 477 Fed.Appx. at 560.
Similarly, Nivia v. Nation Star Mortg., LLC, 620 Fed.Appx. 822 (11th Cir. Aug. 19, 2015), strongly suggests a bar by Rooker-Feldman. In Nivia, a bank won a foreclosure judgment in December 2011. Nine months after the judgment and a month before the foreclosure sale, the mortgagor requested a HAMP modification, which the bank denied. After the sale, the mortgagor sued in federal court for violations of HAMP and Florida's Deceptive and Unfair Trade Practices Act.
Finding the HAMP claim not barred by Rooker-Feldman, Nivia explains, "The homeowners alleged only that the lenders failed to respond adequately to their September 2012 request for a loan modification, which could not have been at issue in the foreclosure proceeding that concluded in December 2011."
Little or nothing appears to distinguish the fraud claim in this action from the RICO claim in Figueroa or the FDUTPA claim in Nivia. The plaintiff alleges that Bank of America misrepresented the eligibility requirement for a modification and that this purported misrepresentation was "specifically designed by BOA to set Plaintiff up for foreclosure." (Doc. 42 at ¶ 42) The majority of the complaint chronicles a scheme in which Bank of America allegedly tricked the plaintiff into not paying the mortgage so that Bank of America could foreclose.
Second, even if not barred by Rooker-Feldman, the fraud claim warrants dismissal for failure to state a claim. As explained elsewhere in this order, the October 30, 2017 complaint stated a claim based on Bank of America's alleged misrepresentation of the eligibility requirement for a modification. The plaintiff allegedly defaulted after Bank of America both instructed him to default and stated that a modification requires a default. Bank of America moved for summary judgment and observed that the plaintiff defaulted in November 2008, two and a half years before the alleged misrepresentation. Of course, a mortgagor cannot reasonably rely in 2008 on a 2011 misrepresentation.
Perhaps recognizing the merit in Bank of America's motion for summary judgment, the plaintiff asserted a new and different fraud theory in response to the motion for summary judgment. In the most recent complaint (Doc. 42), the plaintiff persists in alleging that Bank of America omitted to mention that a "reasonably foreseeable/imminent" default might qualify a mortgagor for a modification. Rather than assert that the misrepresentation induced the default, the plaintiff tacitly concedes a prior default and alleges that the misrepresentation caused the plaintiff to "remain[] in default." (Doc. 42 at 11) As Bank of America correctly argues (Doc. 43 at 18-19), the bank's omitting to mention a circumstance not pertinent to the defaulted mortgagor is immaterial.
In the penultimate paragraph of the response to the motion to dismiss, the plaintiff requests leave to submit a sixth amended complaint. (Doc. 48 at 11) The request warrants denial for at least three reasons. First, Rule 7(b), Federal Rules of Civil Procedure, requires a party to move for relief, and a request buried in a response is not a motion. Long v. Satz, 181 F.3d 1275, 1279-80 (11th Cir. 1999). The plaintiff submits no proposed amendment and fails to explain what the prospective amendment might accomplish. See Long, 181 F.3d at 1280 (affirming the denial of leave to amend where the plaintiff failed to explain the substance of a prospective amendment). Second, a fourth amended complaint unduly prejudices Bank of America. See Foman v. Davis, 371 U.S. 178, 182 (1962). Four complaints and three motions to dismiss in two years of litigation are enough. Third, the plaintiff's conduct in this litigation reveals a "dilatory" intent. See Foman, 371 U.S. at 182. As described in this order and in the June 8 order, the plaintiff has repeatedly and tactically attempted to prolong this litigation.
Bank of America allegedly told the plaintiff that a mortgage modification requires a default but omitted to mention that a "reasonably foreseeable/imminent" default might qualify a mortgagor for a modification. The complaint alleges that Bank of America intentionally misrepresented the requirement in an effort to trick the plaintiff into a foreclosure, which Bank of America successfully secured after suing in state court. Because the fraud claim is "inextricably intertwined" with the state-court foreclosure, Rooker-Feldman bars the claim. In any event, the fraud claim fails to state a claim. The bank's omitting to mention a circumstance not pertinent to the defaulted mortgagor (that is, that a "reasonably foreseeable/imminent" default might qualify for a modification) is immaterial. The motion (Doc. 43) to dismiss is