EDGARDO RAMOS, District Judge.
The Estate of Adele Leventhal ("Plaintiff"), brings suit seeking injunctive and monetary relief against Wells Fargo Bank, N.A. ("Defendant") in connection with two reverse mortgage loan agreements executed by the late Adele Leventhal ("Ms. Leventhal"), her husband, Sidney Leventhal ("Mr. Leventhal"), and Defendant.
Mr. and Ms. Leventhal were the owners of a condominium ("the Property") located in North Miami Beach, Florida.
Although it was not signed by Ms. Leventhal, the power of attorney agreement contained her printed initials, along with the signatures of two witnesses. See id. It was notarized and prepared by one of the witnesses, Leon Bedrick, of North Miami Beach, Florida. Id. The power of attorney was ultimately recorded nearly ten years later, on July 9, 2004 in Miami-Dade County, Florida, along with an affidavit by Mr. Leventhal attesting to the following:
Id., Exs. 6-7.
On July 23, 2004, Mr. and Ms. Leventhal were named as borrowers in a reverse mortgage agreement with Defendant. Compl. ¶ 8. The agreement states that "Borrower does hereby mortgage, grant and convey to Lender" the Property, referred to as the "Admiral's Port Condominium." Napierala Decl., Doc. 18, Ex. 8. Mr. Leventhal executed the security agreement, with a principal amount of $68,832.84, on behalf of himself and Ms. Leventhal, as her attorney-in-fact.
On February 12, 2007, the same parties entered into another reverse mortgage agreement which increased the principal amount of the loan to $142,341.85.
In connection with the second reverse mortgage loan, Defendant arranged for an interview with the borrowers by an individual named Willima C. Taylor ("Ms. Taylor"), conducted on January 8, 2007.
Mr. Leventhal died in January 2009, followed by Ms. Leventhal, who died on February 15, 2012. Compl. ¶¶ 3, 13; see also Napierala Decl., Doc. 18, Ex. 12. On October 21, 2014, Defendant filed an action to foreclose on the Property in the Eleventh Judicial Circuit of Florida, Miami-Dade County. Napierala Decl., Doc. 18, Ex. 11. Ms. Leventhal's son, Barry Bernstein ("Mr. Bernstein") is the executor of her estate and brought this action on its behalf on October 17, 2014.
When ruling on a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Nielsen v. Rabin, 746 F.3d 58, 62 (2d Cir. 2014). The court is not required to credit "mere conclusory statements" or "threadbare recitals of the elements of a cause of action." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)); see also id. at 681 (citing Twombly, 550 U.S. at 551). "To survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to `state a claim to relief that is plausible on its face.'" Id. at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). More specifically, the plaintiff must allege sufficient facts to show "more than a sheer possibility that a defendant has acted unlawfully." Id. If the plaintiff has not "nudged [his] claims across the line from conceivable to plausible, [the] complaint must be dismissed." Twombly, 550 U.S. at 570; Iqbal, 556 U.S. at 680.
The question in a Rule 12 motion to dismiss "`is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.'" Sikhs for Justice v. Nath, 893 F.Supp.2d 598, 615 (S.D.N.Y. 2012) (quoting Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 278 (2d Cir. 1995)). "[T]he purpose of Federal Rule of Civil Procedure 12(b)(6) `is to test, in a streamlined fashion, the formal sufficiency of the plaintiff's statement of a claim for relief without resolving a contest regarding its substantive merits,'" and without regard for the weight of the evidence that might be offered in support of Plaintiff's claims. Halebian v. Berv, 644 F.3d 122, 130 (2d Cir. 2011) (quoting Global Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 155 (2d Cir. 2006)).
On a motion to dismiss, the Court may consider a document that is attached to the complaint, incorporated by reference, or integral to the complaint, provided there is no dispute regarding its authenticity, accuracy or relevance. DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010) (citations omitted). "To be incorporated by reference, the [c]omplaint must make a clear, definite and substantial reference to the documents." Mosdos Chofetz Chaim, Inc. v. Vill. of Wesley Hills, 815 F.Supp.2d 679, 691 (S.D.N.Y. 2011) (internal quotation marks and citation omitted). A court may also take into account matters of which judicial notice can be taken. Leonard F. v. Israel Disc. Bank of New York, 199 F.3d 99, 107 (2d Cir. 1999) (quoting Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991)); see also Fed. R. Evid. 201. Accordingly, it is routine for courts to take judicial notice of court documents, "not for the truth of the matters asserted in the other litigation, but rather to establish the fact of such litigation and related filings." Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d Cir. 1991).
The Complaint expressly relies on three documents, thereby incorporating them by reference: (1) the power of attorney agreement; (2) the 2004 reverse mortgage loan agreement; and (3) the 2007 reverse mortgage loan agreement. Compl. ¶¶ 6, 8, 10; see also Napierala Decl., Doc. 18, Exs. 6, 8-9. All of these documents are also publicly filed and subject to judicial notice.
"[I]t is fundamental that a court should resolve issues of jurisdiction and venue before addressing merits-based arguments[.]" de Ratafia v. Cnty. of Columbia, No. 12 Civ. 5457 (LAP) (DCF), 2013 WL 603128, at *2 (S.D.N.Y. Feb. 7, 2013) (citing Arrowsmith v. United Press Int'l, 320 F.2d 219, 221 (2d Cir. 1963)). Therefore, the Court will first turn to Defendant's motion to transfer venue.
Defendant moves under 28 U.S.C. § 1404(a) to transfer the case to the Eleventh Judicial Circuit of Florida, Miami-Dade County, where the foreclosure action on the Property is currently pending. See Def.'s Mem. L. Mot. Dismiss, Doc. 17 at 16-20; see also Def.'s Reply, Doc. 20 at 9-10. Section 1404(a) provides that, "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). The Supreme Court has observed that, "by its very terms, [§1404(a)] speaks to federal courts; it addresses itself only to that federal forum in which a lawsuit has been initiated; its function is to vest such a federal forum with the power to transfer a transitory cause of action to a more convenient federal court."
Without deciding the issue, the Court notes that various factors weigh in favor of transferring this action to another federal district court in the Southern District of Florida.
However, although a court can sua sponte transfer a case on its own initiative, it should "allow the parties to present their views" before doing so. Ritchie Capital Mgmt., L.L.C. v. JPMorgan Chase & Co., 532 B.R. 461, 471 (S.D.N.Y. 2013) (internal citation and quotation marks omitted). Defendant did not request that the case be transferred to the Southern District of Florida, nor did it otherwise brief the issue. Moreover, this Court is not inclined to transfer this case to another federal judicial district, absent a specific request by one of the parties. To the extent that Defendant may wish to file an application for transfer of venue at some later date, it is reminded that "the timing of a motion to transfer venue, although not by itself normally dispositive, is relevant." Commercial Union Ins. Co. v. Emery Air Freight Corp., No. 92 Civ. 6513 (LMM), 1995 WL 232757, at *1 (S.D.N.Y. Apr. 19, 1995) (citations omitted).
In sum, because § 1404(a) only allows for transfers between federal courts, Defendant's request to transfer this action to the Eleventh Judicial Circuit of Florida must be denied.
Defendant removed this action from state court on the basis of diversity of citizenship pursuant to 28 U.S.C. § 1332. See Doc. 1 ¶¶ 7-9. Plaintiff does not contest the Court's subject matter jurisdiction. A federal court sitting in diversity applies the choice-of-law rules of the forum state. Dessert Beauty, Inc. v. Platinum Funding Corp., 519 F.Supp.2d 410, 418-19, 419 n.61 (S.D.N.Y. 2007) (citing White Plains Coat & Apron Co. v. Cintas Corp., 460 F.3d 281, 284 (2d Cir. 2006)). "In New York, the forum state in this case, the first question to resolve in determining whether to undertake a choice of law analysis is whether there is an actual conflict of laws." Fieger v. Pitney Bowes Credit Corp., 251 F.3d 386, 393 (2d Cir. 2001) (internal quotation marks and citation omitted). There is an "actual conflict" when "the applicable law from each jurisdiction provides differing rules that have the potential to affect the outcome of the case significantly." Horton v. Greenwich Hosp., No. 12 Civ. 4436 (ALC) (RLE), 2014 WL 956468, at *2 n.1 (S.D.N.Y. Mar. 10, 2014) (citing Fin. One Pub. Co. v. Lehman Bros. Special Fin., 414 F.3d 325, 331 (2d Cir. 2005)).
New York courts conduct the choice-of-law analysis separately for each claim under a doctrine called dépeçage. 2002 Lawrence R. Buchalter Alaska Trust v. Philadelphia Fin. Life Assur. Co., No. 12 Civ. 6808 (KMK), 2015 WL 1455805, at *8 (S.D.N.Y. Mar. 31, 2015) (citation omitted). Pursuant to that doctrine, "the rules of one legal system are applied to regulate certain issues arising from a given transaction or occurrence, while those of another system regulate the other issues." Id. (internal quotation marks and citation omitted); see also Hutner v. Greene, 734 F.2d 896, 901 (2d Cir. 1984) (applying California law in determining whether the plaintiff was required to obtain a broker's license, while applying New York law to other aspects of the contract dispute between the parties). Here, Defendant argues that all of Plaintiff's claims are both procedurally and substantively governed by Florida state law. See Doc. 17 at 6, 8. Conversely, Plaintiff maintains that its claims are covered by New York law. Pl.'s Mem. L. Opp., Doc. 19 at 6-7. Accordingly, this Court will follow the dépeçage doctrine and "conduct the choice-of-law analysis separately for each of . . . Plaintiff[']s claims."
"A motion to dismiss on statute of limitations grounds generally is treated as a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6)." Id. at *9 (quoting Nghiem v. U.S. Dep't of Veterans Affairs, 451 F.Supp.2d 599, 602 (S.D.N.Y. 2006) aff'd, 323 F. App'x 16 (2d Cir. 2009)) (internal quotation marks omitted). Given that Defendant bears the burden of establishing the expiration of the statute of limitations as an affirmative defense, "a pre-answer motion to dismiss on this ground may be granted only if it is clear on the face of the complaint that the statute of limitations has run." Fargas v. Cincinnati Mach., LLC, 986 F.Supp.2d 420, 427 (S.D.N.Y. 2013) (citing Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406, 425 (2d Cir. 2008)); see also Ellul v. Congregation of Christian Bros., 774 F.3d 791, 798 n.12 (2d Cir. 2014) ("Although the statute of limitations is ordinarily an affirmative defense that must be raised in the answer, a statute of limitations defense may be decided on a Rule 12(b)(6) motion if the defense appears on the face of the complaint.").
The Court cannot decide whether Plaintiff's claims are time-barred because it is not clear on the face of the Complaint when or where those claims began to accrue. Applying Florida law, Defendant erroneously proceeds on the assumption that each of Plaintiff's claims began to accrue either when Mr. Leventhal acquired the power of attorney, on November 9, 1994, or alternatively, when Mr. and Ms. Leventhal entered into the 2004 and 2007 reverse mortgage agreements with Defendant. Doc. 17 at 9. Thus, Defendant concludes that Plaintiff was required to commence his fraud and negligence claims by February 2011, and the breach of contract claim no later than February 2012. Id. In contrast, Plaintiff applies New York law to conclude that its causes of action began to accrue upon Ms. Leventhal's death. Doc. 19 at 13. Plaintiff's understanding of when its claims began to accrue is also mistaken.
Under both New York and Florida law, a claim for breach of contract begins to accrue at the time of the breach. See T & N PLC v. Fred S. James & Co. of New York, 29 F.3d 57, 59 (2d Cir. 1994) ("Under New York law, a cause of action for breach of contract accrues and the statute of limitations commences when the contract is breached.") (citation omitted); Nyberg v. Cryo-Cell Int'l, Inc., No. 11 Civ. 399-T-30 (AEP), 2013 WL 5408447, at *4 (M.D. Fla. Sept. 25, 2013) ("Under Florida law, a cause of action for breach of contract accrues and the limitations period commences at the time of the breach.") (citations omitted); see also Technical Packaging, Inc. v. Hanchett, 992 So.2d 309, 313 (Fla. Dist. Ct. App. 2008) ("Florida case law consistently holds that a cause of action for breach of contract accrues and the limitations period commences at the time of the breach.") (listing cases).
The Complaint provides no indication as to how Defendant breached the reverse mortgage loan agreements, let alone a date for the breaches. Without this detail, the Court cannot decide when Plaintiff's breach of contract claim began to accrue under either New York or Florida law. Accordingly, Defendant's argument that the cause of action is time-barred is premature and therefore fails.
The statute of limitation for fraud claims under New York law is "the longer of six years from the date on which the fraud occurred, or two years from discovery or the time when the plaintiff should have, with reasonable diligence, discovered the fraud." Gutkowski v. Steinbrenner, 680 F.Supp.2d 602, 615 (S.D.N.Y. 2010) (citing N.Y. C.P.L.R. 213(8)). Florida's four-year statute of limitations for fraud-based claims begins running from when the fraud was, or should have been, discovered. Becnel v. Deutsche Bank, AG, 507 F. App'x 71, 73 (2d Cir. 2013) (citing Fla. Stat. § 95.031(2)(a)). However, unlike New York, Florida requires that a fraud claim be brought "within 12 years after the date of the commission of the alleged fraud, regardless of the date the fraud was or should have been discovered." Kipnis v. Bayerische Hypo-Und Vereinsbank, AG, 784 F.3d 771, 779 (11th Cir. 2015) (quoting Fla. Stat. § 95.031(2)(a)) (internal quotation marks omitted) (emphasis added).
The Complaint alleges that Defendant defrauded Ms. Leventhal, and by extension her estate, through its overvaluation of the Property, charging of excessive origination and closing fees, along with its failure to verify the validity of Mr. Leventhal's power of attorney at the time of the closings. Compl. ¶¶ 26, -28. It also alleges that Ms. Taylor and Ms. Aszli fraudulently certified that they conducted loan interviews. Id. ¶¶ 17, 22. In its opposition papers, Plaintiff maintains Ms. Leventhal did not discover the alleged tortious acts and was incapable of comprehending them even if she had. Doc. 19 at 15. Defendant counters that Mr. Bernstein held a General Power of Attorney to act on Ms. Leventhal's behalf as of July 20, 1992 and discovered the alleged fraud in 2007. Doc. 20 at 7.
Indeed, on various occasions Mr. Bernstein has admitted to the Court that he learned of the two reverse mortgage agreements in 2007. See Doc. 19 at 15. However, the Complaint itself does not establish any facts concerning Mr. Bernstein. Furthermore, it is not clear what effect, if any, Mr. Leventhal's appointment as an attorney-in-fact two years later had on Mr. Bernstein's powers. See Napierala Decl., Doc. 21, Ex. 2. The 1992 power of attorney document itself, which is partially illegible, does not clearly establish that Mr. Bernstein could have brought an action on Ms. Leventhal's behalf.
Even though Florida places a cap of twelve years on fraud claims from the date the fraud was committed, see Fla. Stat. § 95.031(2)(a), it is inapplicable here. The execution of the 1994 power of attorney document is the only event alleged in the Complaint that took place more than twelve years prior to the filing of this action. The Complaint does not claim that Defendant had anything to do with the execution of the document; it merely faults Defendant for failing to confirm its validity at the time of the closings. Compl. ¶ 28. The next event alleged in the Complaint did not take place until July 23, 2004, when Mr. and Ms. Leventhal entered into their first reverse mortgage loan agreement with Defendant—approximately ten years before Plaintiff filed the instant action. Id. ¶ 8.
An identical issue arises when determining whether Plaintiff's negligence claim is timebarred. Under New York law, "a negligence claim accrues on the date of the injury." Ruso v. Morrison, 695 F.Supp.2d 33, 44 (S.D.N.Y. 2010) (citation omitted). Similarly, under Florida law, a negligence claim starts accruing "when the last element constituting the cause of action occurs." Lehman Bros. Holdings Inc. v. Phillips, 569 F. App'x 814, 816-17 (11th Cir. 2014) (quoting Fla. Stat. § 95.031(1)) (internal quotation marks omitted). Specifically, the last element of a negligence cause of action is actual loss or damage. Id. (citing Clay Elec. Coop., Inc. v. Johnson, 873 So.2d 1182, 1185 (Fla. 2003)).
The Complaint alleges that Defendant acted negligently "in connection with the reverse mortgage transactions." Compl. ¶ 18. Specifically, it cites the January 8, 2007 interview that Defendant arranged with Mr. and Ms. Leventhal, at which the person conducting the interview should have determined that Ms. Leventhal was not competent. Id. ¶ 17. The Complaint also maintains that Defendant did not exercise reasonable care, as evidenced by its failure to comply with federal regulations, determine Ms. Leventhal was incompetent, and discover that the power of attorney was invalid. Id. ¶ 18. Yet, at no point does the Complaint allege that Plaintiff was injured as a result of the purported negligence, nor is there any indication as to when such a loss would have taken place. Since a statute of limitations defense does not appear on the face of the Complaint, Defendant's motion is denied.
Under traditional New York choice-of-law rules, absent fraud or a violation of public policy, courts will uphold a choice-of-law clause so long as the state selected has sufficient contacts with the transaction. Int'l Minerals & Res., S.A. v. Pappas, et al., 96 F.3d 586, 592 (2d Cir. 1996) (quoting Klitzman v. Bache Halsey Stuart Shields, Inc., No. 79 Civ. 6249 (JFK), 1985 WL 1984, at *2 (S.D.N.Y. June 27, 1985)). Both of the reverse mortgage agreements contain identical provisions stating that they shall be governed by federal law and the "law of the jurisdiction in which the Property is located." Napierala Decl., Doc. 18, Ex. 8 at ¶ 13; Ex. 9 at ¶ 13. The reverse mortgage loans were notarized by Florida notary publics and recorded in Miami-Dade County, Florida. Napierala Decl., Doc. 18, Ex. 8 at ¶ 13; id., Ex. 9 at ¶ 13. This, together with the fact that the Property itself is located in Florida, provides sufficient contacts to warrant the application of Florida law in accordance with the choice-of-law provision in the agreements.
The elements of a breach of contract claim under Florida law consist of: "(1) the existence of a contract; (2) a material breach of that contract; and (3) damages resulting from the breach."
Plaintiff fails to allege a single element of a breach of contract claim. First, although the Complaint acknowledges that two reverse mortgage loan agreements exist, it maintains that they are invalid. Compl. ¶ 33. Specifically, it claims that Ms. Leventhal was incompetent and could not have understood or accepted Defendant's offer to enter into a reverse loan mortgage agreement. Id. ¶ 14. It also maintains that the power of attorney was invalid, which suggests that Mr. Leventhal did not have the authority to accept Defendant's offer on behalf of Ms. Leventhal. Id. ¶¶ 9, 11, 25, 33. Second, Plaintiff does not cite a single term of the reverse mortgage agreements that Defendant has failed to comply with.
Plaintiff's action is premised on the presumption that Ms. Leventhal was incapable of agreeing to the terms of the reverse mortgage agreements and that the power of attorney that Mr. Leventhal invoked to bind her to the contracts is invalid. Since this runs counter to the essential requirements of offer and acceptance, any amendment to the breach of contract claim would be futile. Therefore, the breach of contract claim is dismissed, with prejudice. See LaVoice v. UBS Fin. Servs., Inc., No. 11 Civ. 2308 (KMW) (JLC), 2013 WL 5380759, at *3 n.6 (S.D.N.Y. Sept. 26, 2013) ("A court [ ] has discretion to dismiss with prejudice if it believes that amendment would be futile or would unnecessarily expend judicial resources.") (internal quotation marks and citation omitted) (alteration in original).
"In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). The Second Circuit "has read Rule 9(b) to require that a complaint `(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.'" Rombach v. Chang, 355 F.3d 164, 170 (2d Cir. 2004) (quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993)).
The elements of fraud are essentially the same under both New York and Florida law, except Florida law uses "slightly different wording and numbering."
The Complaint fails to state a claim for fraud. It does not claim that Defendant made any false statements, misrepresentations, or omissions of fact. At most, the Complaint states, in wholly conclusory terms, that Defendant's overvaluation of the Property and fees were fraudulent, Ms. Taylor fraudulently certified that she conducted an in-person interview with Mr. and Mrs. Leventhal, and Ms. Aszli fraudulently certified that she conducted a telephone interview.
Defendant asks that the Court dismiss all of Plaintiff's claims with prejudice.
Under New York law, a negligence claim consists of three elements: "(1) the defendant owed the plaintiff a cognizable duty of care as a matter of law; (2) the defendant breached that duty; and (3) plaintiff suffered damage as a proximate result of that breach." Millennium Partners, L.P. v. U.S. Bank Nat. Ass'n, No. 12 Civ. 7581 (HB), 2013 WL 1655990, at *4 (S.D.N.Y. Apr. 17, 2013) (quoting McCarthy v. Olin Corp., 119 F.3d 148, 156 (2d Cir. 1997)) (internal quotation marks omitted). Once again, the elements of a negligence claim are identical under Florida law. See Lambert v. United States, 198 F. App'x 835, 838 (11th Cir. 2006) ("To state a claim for negligence under Florida law, a plaintiff must allege that the defendant owed the plaintiff a duty of care, that the defendant breached that duty, and that the breach caused the plaintiff to suffer damages.") (internal quotation marks and citation omitted); see also In re Fosamax Products Liab. Litig., 742 F.Supp.2d 460, 470 (S.D.N.Y. 2010) (citing the elements of a negligence claim under Florida law).
Defendant argues that Plaintiff's negligence claim fails because, as a lender, it did not owe Plaintiff, a borrower, any special duties of care. Doc. 17 at 14. Indeed, "[i]t is well settled under New York law that a lender is not in a fiduciary relationship with a borrower, and thus a lender does not owe a borrower any special duties." Abraham v. Am. Home Mortgage Servicing, Inc., 947 F.Supp.2d 222, 236 (E.D.N.Y. 2013) (listing cases). Similarly, under Florida law, "[t]he general rule is that the relationship between a bank and its borrower is that of a creditor-debtor and that a bank owes the borrower no fiduciary duty." Silver v. Countrywide Home Loans, Inc., 760 F.Supp.2d 1330, 1338 (S.D. Fla. 2011) aff'd, 483 F. App'x 568 (11th Cir. 2012) (citing McCulloch v. PNC Bank Inc., 298 F.3d 1217, 1226 n.13 (11th Cir. 2002)). In fact, in applying Florida law, one district court in the Southern District of Florida dismissed a negligence claim brought by a mortgagor against her loan servicer, reasoning that "there is no tort duty to process loans competently" and that "[t]he relationship is contractual; there is either a breach of that contract or not."
Ms. Leventhal was certainly no ordinary borrower. According to the Complaint, she was incapable of communicating and her comprehension skills were severely impaired. However, her situation does not trigger any recognized exceptions to the general rule that lenders do not owe borrowers special duties. See Silver, 760 F. Supp. 2d at 1338 ("Under special circumstances . . . a bank may owe a duty to disclose certain material information peculiarly within its knowledge, and not otherwise available to the customer [under Florida law].") (internal quotation marks and citation omitted); Roswell Capital Partners LLC v. Alternative Const. Technologies, 638 F.Supp.2d 360, 368-69 (S.D.N.Y. 2009) ("A lender-borrower relationship may give rise to fiduciary duty under New York law where there exists `a confidence reposed which invests the person trusted with an advantage in treating with the person so confiding, or an assumption of control and responsibility.'") (quoting Manufacturers Hanover Trust Co. v. Yanakas, 7 F.3d 310, 318 (2d Cir. 1993)).
More importantly, Mr. Leventhal executed the reverse mortgage agreements on behalf of Ms. Leventhal, pursuant to a power of attorney, which Defendant reasonably relied on. Thus, even assuming that Defendant owed Plaintiff a duty of care under the circumstances alleged, Plaintiff cannot establish that Defendant breached any such duty. Defendant was entitled to rely on the power of attorney, as nothing in the Complaint suggests that Defendant acted in bad faith or had actual knowledge that Ms. Leventhal lacked the capacity to execute it at the time she executed it.
Not only does the Complaint fail to establish the existence of a duty of care breached by Defendant, it also neglects to allege that Plaintiff suffered any damages as a result of Defendant's purported negligence. Given that borrowers do not owe lenders any special duties under both Florida and New York law, together with the fact that third parties may generally rely on a power of attorney, any amendment to Plaintiff's negligence claim would be futile. Therefore, it is dismissed, with prejudice.
The Complaint alleges, several times, that Defendant violated numerous federal regulations, primarily in connection with the December 12, 2006 and January 8, 2007 interviews. See Compl. ¶¶ 11, 12, 18, 20-21, 22, 36. The only statute identified by Plaintiff is "[s]ection 255 of the National Housing Act and the regulations under 24 CFR [§] 206.41." Id. ¶¶ 13, 22. In its opposition papers, Plaintiff claims that Defendant also violated New York General Business Law § 349. Doc. 19 at 17. However, since the Complaint itself makes no mention of the statute and Plaintiff has not otherwise sought leave to amend, it will not consider this additional claim.
The Court construes the Complaint as alleging violations of the HECM statute, 12 U.S.C. § 1715z-20, and its implementing regulations, see 24 C.F.R. § 206, which imposes counseling requirements in connection with reverse mortgages.
For the foregoing reasons, Defendant's motion to transfer is DENIED and its motion to dismiss is GRANTED. All of Plaintiff's claims are dismissed with prejudice, except for the fraud claim. The Clerk of the Court is respectfully directed to terminate the motion, Doc. 16.
If Plaintiff chooses to file an amended complaint, it shall do so by
It is SO ORDERED.
Wolfert ex rel. Estate of Wolfert v. Transamerica Home First, Inc., 439 F.3d 165, 166-67 (2d Cir. 2006).
Everlast, 928 F. Supp. 2d at 743 (citations omitted).
See Deutsche Bank Nat. Trust Co. v. Prevratil, 120 So.3d 573, 576 n.1, 577 n.4 (Fla. Dist. Ct. App. 2013).
In addition, since the Court is dismissing all of Plaintiffs causes of action for failure to state a claim, it need not reach the issue of the availability of certain remedies.
