MacK v. Bear Stearns Residential Mortgage Corp.
2010 U.S. Dist. LEXIS 126023
E.D. Pa.2010Background
- Mack faced impending foreclosure in 2006 and was solicited by Foreclosure Solution Specialists to help keep her home.
- Green led Mack to believe FSS was affiliated with Mack's mortgagee Wachovia and urged refinancing via FSS.
- Mack was instructed to sign a quitclaim deed and another unrecorded deed escrowed to be released after a year of payments.
- Closing documents were prepared by Price; Brown acted as closing notary, and Mack signed after assurances of legitimacy.
- A HUD-1 disbursement showing about $65,434.08 was issued to Price via a forged fax by 1st Continental; Mack received no funds.
- Mack later learned Marks acquired the property, and Bear Stearns/U.S. Bank/EMC foreclosed and sold the home in 2009; Mack filed suit in 2009, amending in 2010 seeking unjust enrichment, UTPCPL, CROA violations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Unjust enrichment against EMC Defendants | Mack asserts EMC benefited from the loan and had notice. | EMC argues no direct benefit and no notice of fraud. | Unjust enrichment claim stated; EMC motion denied on this claim. |
| UTPCPL claim against EMC Defendants | UTPCPL applies to the broad scheme against Mack. | EMC contends UTPCPL should be dismissed or limited. | UTPCPL claim dismissed as to EMC Defendants. |
| Supplemental jurisdiction over UTPCPL against Brown | UTPCPL related to CROA claim; should be heard together. | No supplemental jurisdiction or improper relation. | Court has supplemental jurisdiction; Brown's motion denied. |
| Price's motion to dismiss | Price participated in or facilitated the scheme; not an innocent trustee defense. | Price was a mere trustee with no profit; dismissal should follow. | Motion denied; factual defenses inappropriate at 12(b)(6). |
Key Cases Cited
- Sidle v. Kaufman, 345 Pa. 549, 29 A.2d 77 (Pa. 1942) (purchasers/mortgagees face inquiry notice of adverse facts)
- In re Fowler, 425 B.R. 157 (Bankr. E.D. Pa. 2010) (duty of inquiry in real property transactions; notice standard)
- Styer v. Hugo, 535 Pa. 610, 637 A.2d 276 (1994) (unjust enrichment framework and standards of inequity)
- Stoeckinger v. Presidential Fin. Corp. of Del. Valley, 948 A.2d 828 (Pa. Super. Ct. 2008) (unjust enrichment elements and equity considerations)
- MacKubbin v. Rosedale Mem'l Park, Inc., 435 Pa. 374, 257 A.2d 587 (1969) (third-party restitution depending on value and notice)
- Mazurkiewicz v. Doylestown Hosp., 223 F. Supp. 2d 661 (E.D. Pa. 2002) (common nucleus of operative fact for related claims)
- De Asencio v. Tyson Foods, Inc., 342 F.3d 301 (3d Cir. 2003) (test for supplemental jurisdiction; common facts)
- Borough of West Mifflin v. Lancaster, 45 F.3d 780 (3d Cir. 1995) (analysis of when to decline supplemental jurisdiction)
- Dimensional Music Publ'g, LLC v. Kersey, 448 F. Supp. 2d 643 (E.D. Pa. 2006) (1230-33 considerations for common factual basis)
- Twombly v. Bell Atl. Corp., 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) (two-pronged plausibility standard for federal pleading)