MEMORANDUM
1. INTRODUCTION
This case arises from defendants HSBC Mortgage Corporation’s (“HSBC Mortgage”) and HSBC Mortgage Services, Inc.’s (“HSBC Services”) practice of force-placing
II. BACKGROUND
A. LaQuenta and Sergio Montanez
LaQuenta and Sergio Montanez are a married couple living in Philadelphia. (Am. Compl. ¶ 16.) On or about December 13, 2005, they obtained a home mortgage loan from HSBC Mortgage in the amount of $85,800. (Id. ¶ 17; Mortgage Contract, Am. Compl. Ex. 1.) Section five of the mortgage contract required plaintiffs to maintain insurance on the property. (Mortgage Contract, Am. Compl. Ex. 1 § 5.) Section five of the mortgage contract also stated,
If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender’s option and Borrower’s expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower’s equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained.
(Id.) This clause allowed HSBC Mortgage to “force-place” insurance on the property if plaintiffs failed to maintain the required insurance. (Am. Compl. ¶ 2.) The purpose of force-placing insurance is to protect the lender’s security interest in the property in the event that the borrower fails to insure the property adequately. (Id. ¶ 64.)
Plaintiffs obtained a homeowner’s insurance policy when HSBC Mortgage issued the mortgage loan. (Id. ¶ 18.) The policy covered the period from December 9, 2005, through December 9, 2006, and the annual premium was $698. (Id.) However, the issuer of that policy notified plaintiffs in early 2006 that the policy would be can-celled “due to an adjacent dwelling that was boarded up.” (Id.) Plaintiffs thereafter obtained another insurance policy, effective February 21, 2006, with an annual premium of $1,016.40 (“February 21, 2006, Policy”). (/¿¶21.)
On or about April 18, 2006, HSBC Mortgage’s Insurance Department sent plaintiffs a letter requesting proof of insurance and stating that HSBC Mortgage would force-place insurance on the property unless it received such proof within ten days. (Id. ¶ 22, Ex. 8.) The letter stated that the policy that HSBC Mortgage would force-place would have an annual premium of $1,302 and would not cover some items that might have been covered under plaintiffs’’ prior coverage. (Id.) Plaintiffs sent a fax to HSBC Mortgage on May 10, 2006, stating that they had sent HSBC Mortgage a copy of the February 21, 2006, Policy on April 5, 2006, and attaching another copy of the policy. (Id. ¶ 23.) Nevertheless, HSBC Mortgage sent plaintiffs a letter on May 19, 2006, stating that HSBC Mortgage had force-placed the insurance policy with an annual premium of $1,302.
On or about April 22, 2008, plaintiffs received another letter from HSBC Mortgage’s Insurance Department stating that it had purchased another force-placed insurance policy. (Id. ¶ 26.) While the letter stated that HSBC Mortgage was “now” providing the force-placed insurance, the policy actually became effective on February 21, 2008. (Id.) The annual premium was $1,271. (Id.) That policy was renewed three times, effective February 2009, February 2010, and February 2011. (Id. ¶¶ 27-29.) On April 5, 2011, the property was foreclosed upon and the Sheriff of the County of Philadelphia sold it to HSBC Mortgage for $8,500. (Id. ¶30, Ex. 16.)
HSBC Services was not directly involved with plaintiffs’ mortgage. However, plaintiffs allege that HSBC Services “received financial benefits in connection with Mr. and Mrs. Montanez’s force-placed insurance policies.” (Id. ¶ 31.) The Amended Complaint does not specify how HSBC Services received such benefits; it merely states that HSBC Services and HSBC Mortgage are affiliates. (Id. ¶ 34.)
B. General Allegations Regarding Defendants’ Force-Placed Insurance Practices
HSBC Mortgage is a residential mortgage lender, originator, and servicer. (Id. ¶ 36.) HSBC Mortgage serviced plaintiffs’ loan. (Id.) HSBC Services “primarily services mortgage loans of borrowers who were financed by two former institutions acquired by defendants’ parent company, HSBC Holdings PLC.” (Id. ¶ 37.) Plaintiffs allege that both defendants regularly use their right to force-place insurance on property to profit at the borrowers’ expense. (Id. ¶ 4.) Plaintiffs allege that defendants do so in two ways: through kickbacks and redundant charges. According to the Amended Complaint, both defendants engaged in these general practices, (e.g., id. ¶ 45), and both defendants took steps to keep this scheme secret, (id. ¶¶ 65,104,105,108,109).
1. Kickbacks
According to plaintiffs, defendants receive kickbacks from insurers that provide force-placed insurance policies. (Id. ¶¶ 54-68.) Specifically, defendants purchase force-placed insurance policies at unreasonably high prices — which the borrower ultimately pays — and then receive a certain amount of the premiums back from the insurer pursuant to either a “commission arrangement” or a “captive reinsurance arrangement.” (Id.) Under a commission arrangement, the insurance provider pays a commission to the lender or the lender’s affiliate — in essence, a kickback. (Id. ¶55.) Because the borrower ultimately bears the cost of the policy, this commission acts as payment from the borrower to lender. (Id.) Under a captive reinsurance arrangement, the lender or a subsidiary agrees to reinsure a portion of the policy in exchange for a portion of the premium. (Id. ¶ 56.) Plaintiffs allege that HSBC Mortgage accepted kickbacks in force-placing insurance on plaintiffs’ property. (Id. ¶ 31.)
2. Redundant Charges
Defendants allegedly increase the kickbacks they receive by force-placing insur
III. LEGAL STANDARD
To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must allege facts that “‘raise a right to relief above the speculative level.’ ” Victaulic Co. v. Tieman,
In Twombly, the Supreme Court used a “two-pronged approach,” which it later formalized in Iqbal. Iqbal,
IV. DISCUSSION
Plaintiffs assert three claims against HSBC Mortgage. First, plaintiffs make a breach-of-contract claim in Count II, alleging that HSBC Mortgage breached the implied covenant of good faith and fair dealing inherent in every contract in Pennsylvania by secretly profiting from the force-placement of insurance on plaintiffs’ property. Second, plaintiffs make a claim in Count III for unjust enrichment. Third, plaintiffs make a claim in Count IV under the UTPCPL’s prohibition on “fraudulent or deceptive conduct.” 73 Pa. Stat. Ann. §§ 201-2(4)(xxi) & 201-3.
HSBC Mortgage seeks dismissal of all claims against it. First, it argues that the mortgage contract gave it discretion to force-place any insurance policy it deemed appropriate on plaintiffs’ property. Second, it argues that an action for unjust enrichment may not be maintained in the presence of an express contract and that plaintiffs have failed to allege that HSBC Mortgage was unjustly enriched. Third, it argues that the economic loss doctrine bars plaintiffs’ UTPCPL claim and that plaintiffs have failed to sufficiently state a claim under the UTPCPL.
HSBC Services first argues that plaintiffs lack standing to sue it under Article III of the United States Constitution because HSBC Services was not involved in force-placing the policies on plaintiffs’ property. Alternatively, HSBC Services argues that plaintiffs have failed to state a claim against it under either an unjust enrichment theory or the UTPCPL.
This Memorandum will first address the Article III standing issue. Then it will proceed to the arguments related to Count II, Count III, and Count IV in turn.
A. Article III Standing
HSBC Services contends that “[plaintiffs lack standing to sue HSBC Mortgage Services because they have not alleged any conduct undertaken by HSBC Mortgage Services in connection with the origination or servicing of their mortgage loan, let alone any conduct that caused them alleged injury.” (Mem. Law Supp. Def. HSBC Mortgage Services, Ine.’s Mot. Dismiss First Am. Class Action Compl. Notice Joinder (“HSBC Services Br.”) 4.)
Article III of the Constitution of the United States provides that a federal court may exercise jurisdiction only where there is an actual case or controversy to be decided. See Golden v. Zwickler,
First, the plaintiff must have suffered “an injury in fact”—an invasion of a legally protected interest which is (a) concrete and particularized, and (b) “actual or imminent, not ‘conjectural’ or ‘hypothetical.’ ” Second, there must be a causal connection between the injury and the conduct complained of—the injury has to be “fairly ... tracefable] to the challenged action of the defendant, and not ... th[e] result [of] the independent action of some third party not before the court.” Third, it must be “likely,” as opposed to merely “speculative,” that the injury will be “redressed by a favorable decision.” [Simon v. Eastern Kentucky Welfare Rights Organization,] Id. at [426 U.S. 26 ] 38, 42 [96 S.Ct. 1917 ,48 L.Ed.2d 450 (1976) ].
Id. at 560-61,
Further, plaintiffs in a putative class action “ ‘must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.’ ” Klein v. Gen. Nutrition Cos.,
Plaintiffs have established these three elements of standing with respect to their claims against HSBC Services. First, they have alleged a “concrete and particularized” injury because they allege that they paid too much for the force-placed insurance policies. Second, they have established a causal connection because they allege that HSBC Services worked with HSBC Mortgage—the entity that actually charged plaintiffs the higher premiums—to conceal the kickbacks and redundant charges, (Am. Compl. ¶¶ 65, 104, 105, 108, 109), which allowed HSBC Mortgage to continue with the allegedly unlawful scheme. Finally, plaintiffs seek money damages, a “very conventional remedy” that “would do much to redress their injuries.” Carlough v. Amchem Prods., Inc.,
For the aforementioned reasons, the Court concludes that plaintiffs have Article III standing with respect to their claims against HSBC Services.
B. Count II—Breach of Contract Claim Against HSBC Mortgage
To prove a breach of contract under Pennsylvania law, a plaintiff must establish “(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract^] and (3) resultant damages.” Ware v. Rodale Press, Inc.,
Section 205 of the Restatement (Second) of Contracts states, “Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” The Pennsylvania Superior Court adopted this section of the Restatement in Creeger Brick & Building Supply Inc. v. Mid-State Bank & Trust Co., 385 Pa.Super. 30,
In this case, plaintiffs have alleged facts sufficient to state a claim for breach of the implied covenant of good faith and fair dealing. The purpose of a force-placement clause is to protect the lender’s interest in the property securing the mortgage loan. Plaintiffs allege a scheme whereby HSBC Mortgage used its power to force-place insurance on the property to gain additional profits at plaintiffs’ expense rather than using such power simply to protect its interest in the property. While section five of the mortgage contract did not require HSBC Mortgage to obtain the cheapest or most cost-effective insurance available, it was not entitled to use its discretion to obtain secret kickbacks on policies or charge plaintiffs for insurance covering periods of time that had passed without damage occurring to the property. Such behavior contravened plaintiffs’ reasonable expectations. For this reason, courts around the country have held in cases with almost identical facts that plaintiffs stated a claim for breach of the cove
In its briefs in support of its Motion to Dismiss, HSBC Mortgage cites numerous cases for the proposition that “the implied duty of good faith cannot act to displace the express terms of the contract. Further, there can be no implied duty as to any matter specifically covered by the written agreement.” Middletown Carpentry v. C. Arena & Co., Inc., No. 2698, CONTROL 091526,
Lorah is plainly distinguishable from this case. In that case, there was no allegation that the bank had anything to do with the swindler’s activities or that the bank profited by any secret deals with third parties. Rather, plaintiffs in that case argued that the bank should have exceeded the requirements of the mortgage contract to accommodate them. Plaintiffs in this case allege that HSBC Mortgage engaged in a nefarious and secret scheme to profit from the force-placed
Finally, the Court notes that in many of the cases involving force-place insurance cited above, the courts were interpreting the law of states that, like Pennsylvania, do not permit the implied covenant of good faith and fair dealing to change the express terms of a contract. See, e.g., McNeary-Calloway,
For the reasons stated above, the Court concludes that plaintiffs have stated a claim for breach of the implied covenant of good faith and fair dealing. Thus, the Court denies HSBC Mortgage’s Motion to Dismiss as to Count II.
C. Count III — Unjust Enrichment
In Count III, plaintiffs make claims for unjust enrichment against both defendants. For the reasons that follow, the Court grants both defendants’ motions to dismiss with respect to Count III.
1. Unjust-Enrichment Claim Against HSBC Mortgage
HSBC Mortgage argues that the existence of the mortgage contract bars plaintiffs’ claim for unjust enrichment against HSBC Mortgage. Plaintiffs acknowledge that unjust enrichment claims are “not applicable to agreements deliberately entered into by the parties,” Third Nat’l Bank & Trust Co. of Scranton v. Lehigh Valley Coal Co.,
Pennsylvania has long ascribed to the rule that when the “parties’ relationship is based on an express written contract no unjust enrichment recovery is permitted.” Novacare, Inc. v. S. Health Mgmt. Inc., No. 97-5903,
Plaintiffs argue that they are exercising their right to plead in the alternative. However, this argument ignores the fact that, in this case, there is no dispute that the mortgage contract was valid and enforceable. Courts typically allow a plaintiff to plead both a breach-of-contract claim and an unjust-enrichment claim only where there is some dispute as to whether a valid, enforceable written contract exists. See, e.g. Premier Payments Online, Inc. v. Payment Sys. Worldwide,
Because there is no dispute that the mortgage contract in this case was valid and enforceable, plaintiffs may not assert an unjust-enrichment claim premised on the absence of a contract. Thus, plaintiffs’ unjust-enrichment claim against HSBC Mortgage is dismissed.
2. Unjust-Enrichment Claim Against HSBC Services
Because there is no contract between plaintiffs and HSBC Services, the analysis set forth in the previous section does not
“In Pennsylvania, a party seeking to plead unjust enrichment must allege the following elements: ‘(1) a benefit conferred on the defendant by the plaintiff; (2) appreciation of the benefit by the defendant; and (3) the defendant’s acceptance and retention of the benefit under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.’ ” Kliesh v. Select Portfolio Servicing, Inc., No. 12-548,
The only allegation that plaintiffs’ payments benefitted HSBC Services is contained in paragraph thirty-one of the Amended Complaint, which states, “Upon information and belief, Defendants and/or their subsidiaries/affiliates received financial benefits in connection with Mr. and Mrs. Montanez’s force-placed insurance policies.”
Plaintiffs argue that they have alleged that HSBC Services assisted HSBC Mortgage in both carrying out its scheme and keeping that scheme secret. However, this does not change the fact that plaintiffs have not alleged that HSBC Services received a benefit from plaintiffs.
Accordingly, the Court concludes that plaintiffs have failed to state a claim for unjust enrichment against HSBC Services.
D. Count IV — UTPCPL
Plaintiffs make claims against both defendants under the UTPCPL, 73 Pa. Stat. Ann. §§ 201-1 et seq. Section 201-3 of the UTPCPL makes “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce ... unlawful.”
Both defendants seek dismissal of Count IV, albeit on different grounds. This Memorandum will first address HSBC Mortgage’s argument that the economic loss doctrine bars plaintiffs’ claim under the UTPCPL against HSBC Mortgage. It will then address HSBC Services’ argument that plaintiffs have failed to state a claim against it for a violation of the UTPCPL.
1. UTPCPL Claim Against HSBC Mortgage
HSBC Mortgage argues that plaintiffs’ UTPCPL claim is barred by the economic loss doctrine. The economic loss doctrine provides that “no cause of action [can] be maintained in tort for negligence or strict liability where the only injury was ‘economic loss’—that is, loss that is neither physical injury nor damage to tangible property.” 2-J Corp. v. Tice,
In Werwinski, the Third Circuit addressed for the first time the question whether the economic loss doctrine applies to intentional torts, including claims under the UTPCPL involving allegations of fraud. Id.
In this case, plaintiffs have suffered purely economic loss. Plaintiffs do not allege any injury to themselves or to their tangible property. In essence, plaintiffs contend that HSBC Mortgage’s behavior caused plaintiffs to pay too much for insurance coverage. This is analogous to the Werwinski plaintiffs’ claim they paid too much for faulty automobile transmissions.
Further, the narrow exception from Werwinski does not apply in this case because plaintiffs’ claim does not “arise independently of the underlying contract.” The HSBC Mortgage’s alleged behavior on which plaintiffs’ UTPCPL
Accordingly, the economic loss doctrine bars plaintiffs’ claim under the UTPCPL against HSBC Mortgage. Count IV, as asserted against HSBC Mortgage, is dismissed.
2. HSBC Services
HSBC Services argues that plaintiffs have failed to allege facts sufficient to state a claim for deception under the UTPCPL.
First, a plaintiff must allege facts showing a deceptive act, that is conduct that is likely to deceive a consumer acting reasonably under similar circumstances. Next, the plaintiff must allege justifiable reliance, in other words that he justifiably bought the product in the first place (or engaged in some other detrimental activity) because of the defendants’ misrepresentation or deceptive conduct. Finally, the plaintiff must allege that this justifiable reliance caused ascertainable loss.
Seldon v. Home Loan Serv., Inc.,
Plaintiffs have not alleged that HSBC Services engaged in any conduct that could be described as deceptive. “Deception ... is defined as intentional misleading by falsehood spoken or acted.” Christopher v. First Mut. Corp., No. 05-1149,
Accordingly, plaintiffs have failed to state a claim against HSBC Services under the UTPCPL.
V. CONCLUSION
For the above-stated reasons, the Court grants in part and denies in part HSBC Mortgage’s Motion to Dismiss and grants HSBC Services’ Motion to Dismiss. Count III, a claim for unjust enrichment, and Count IV, a claim under the UTPCPL, are dismissed with respect to plaintiffs’ claims against HSBC Mortgage. All claims against HSBC Services are dismissed. The dismissal of plaintiffs’ claims is without prejudice to plaintiffs’ right to file a Second Amended Class Action Complaint consistent with this Memorandum if warranted by the facts.
An appropriate Order follows.
ORDER
AND NOW, this 17th day of July, 2012, upon consideration of Motion to Dismiss First Amended Class Action Complaint by Defendant HSBC Mortgage Corporation (USA) (Document No. 54, filed December 30, 2011), Defendant HSBC Mortgage Ser
1. Defendant HSBC Mortgage Services, Inc.’s Motion to Dismiss First Amended Class Action Complaint and Notice of Joinder in Motion to Dismiss First Amended Class Action Complaint of Defendant HSBC Mortgage Corporation (USA) is GRANTED and all claims against HSBC Mortgage Services, Inc. are DISMISSED.
2. Motion to Dismiss First Amended Class Action Complaint by Defendant HSBC Mortgage Corporation (USA) is GRANTED IN PART AND DENIED IN PART as follows:
a. That part of the Motion to Dismiss First Amended Class Action Complaint by Defendant HSBC Mortgage Corporation (USA) seeking to dismiss Count II, a claim for breach of contract, is DENIED.
b. That part of the Motion to Dismiss First Amended Class Action Complaint by Defendant HSBC Mortgage Corporation (USA) seeking to dismiss Count III, a claim for unjust enrichment, and Count IV, a claim under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, is GRANTED. Counts III and IV, as asserted against HSBC Mortgage Corporation (USA) are DISMISSED.
IT IS FURTHER ORDERED that all rulings in this Order are WITHOUT PREJUDICE to plaintiffs’ right to file, within twenty (20) days, a Second Amended Class Action Complaint consistent with this Order and the Memorandum dated July 17, 2012, if warranted by the facts.
IT IS FURTHER ORDERED that a telephone conference to schedule further proceedings will be held in due course.
Notes
. Force-placing insurance, as explained more fully below, occurs when a borrower fails to maintain the amount of property insurance required by a mortgage contract and the lender or servicer purchases the insurance at the borrower's expense in order to protect the lender’s security interest in the property.
. In the First Amended Class Action Complaint ("Amended Complaint”), plaintiffs also make claims under the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq. ("RESPA”). By Joint Stipulation and Order of May 3, 2012, the parties agreed to dismiss plaintiffs’ RESPA claims.
. As required on a motion to dismiss, the Court takes all plausible factual allegations contained in plaintiffs’ Amended Complaint to be true.
. It is unclear from the present state of the record why HSBC Mortgage force-placed an insurance policy on plaintiffs’ property when plaintiffs allegedly had a policy on the proper
. The Amended Complaint does not state whether plaintiffs made the required interest payments after 2006. However, neither party has alleged that plaintiffs failed to make any of their mortgage payments at any time. HSBC Mortgage foreclosed on the property, but not until 2011. (Am. Compl. ¶ 30.)
. A “standard mortgage clause” is a clause in an insurance policy requiring the insurer to continue to insure the property, even if the insured fails to make premium payments, in order to protect a lender’s interest in the property. (Id. ¶ 72.) The related “Lender’s Loss Payable Endorsement” functions similarly. (Id.)
. Plaintiffs originally asserted their breach-of-contract claim against both defendants. In their Opposition to Defendant HSBC Mortgage Service Inc.’s Motion to Dismiss First Amended Class Action Complaint ("Plaintiffs’ Opposition to HSBC Service’s Motion to Dismiss”), plaintiffs state that they do "not oppose the dismissal, without prejudice, of the breach of contract claim as to HSBC Mortgage Services. They do so reserving all rights to re-assert such claims on their own behalf and/or on behalf of the class they seek to represent should they deem it appropriate based upon the facts as developed through discovery and through [p]laintiffs’ ongoing investigation.” (Pis.’ Opp’n HSBC Service’s Mot. Dismiss 14-15.) Accordingly, the Court dismisses without prejudice Count II of the Amended Complaint as asserted against HSBC Services.
. Although the Court concludes that plaintiffs have failed to state a claim against HSBC Services, the Court addresses the standing question first because "[i]t is well-established that a plaintiff's Article III standing is a prerequisite for the federal courts to decide the merits of a suit.” In re Sobering Plough Corp. Intron/Temodar Consumer Class Action,
. In their Opposition to HSBC Mortgage’s Motion to Dismiss, plaintiffs assert for the first time a breach of an express provision of the contract. Plaintiffs argue that the mortgage contract states that "the insurance required by [HSBC Mortgage] 'shall be maintained in the amounts [ ] and for the periods that [HSBC Mortgage] requires.' ” (Pis.' Opp’n HSBC Mortgage’s Mot. Dismiss 25 (quoting Mortgage Contract, Am. Compl. Ex. 1, § 5 (second alteration in original)).) Plaintiffs argue that HSBC Mortgage breached section five of the mortgage contract because it force-placed insurance policies that were not "required.”
The Court rejects this argument. First, the claim is not included in the Amended Complaint; the Amended Complaint asserts a breach-of-contract claim based solely on the implied covenant of good faith and fair dealing. Second, as HSBC Mortgage correctly points out, plaintiffs have taken that quote out of context. The mortgage contract places no explicit limit on, the amount or type of insurance that HSBC Mortgage may purchase under its force-placement powers. Rather, the clause plaintiffs cite creates a duty on plaintiffs to purchase insurance "in the amounts ... and for the periods that [HSBC Mortgage] requires.” (Mortgage Contract, Am. Compl. Ex. 1, § 1.)
. HSBC Mortgage cites one case to the contrary. See Lass v. Bank of Am., No. 11-10570,
. The facts of Lorah can be found in a related Third Circuit opinion, Jones v. ABN Amro Mortgage Group, Inc.,
. HSBC Mortgage relies on another case, Brisbin v. Superior Valve Co.,
. Plaintiffs cite two other cases in which they contend courts permitted the pleading of breach-of-contract and unjust-enrichment claims alternatively even though there was no dispute as to the contract's validity or enforceability. In Robinson v. Holiday Universal, Inc., No. 05-5726,
The other case plaintiffs rely on, United States v. Kensington Hospital,
. Plaintiffs did not aver in the Amended Complaint that HSBC Services received any direct benefit from plaintiffs, as opposed to “borrowers” generally. (See, e.g., Am. Compl. ¶ 70 ("Defendants have required borrowers to pay for unnecessary insurance coverage.” (emphasis added)).) However, that some class members may have conferred a benefit on HSBC Services does not save plaintiffs’ claim. See Klein v. Gen. Nutrition Cos.,
. Werwinski has generated a good deal of controversy. See Ferki v. Wells Fargo Bank, Nat. Assn, No. 10-2756,
. The only inference the Court can draw from this allegation is that HSBC Services derives benefit from the revenue of HSBC Mortgage because the two entities are affiliates. However, ”[a]s a matter of well-settled common law, a subsidiary is a distinct legal entity and is not liable for the actions of its parent or sister corporations simply by dint of the corporate relationship.” In re Ins. Brokerage Antitrust Litig.,
. Plaintiffs argue that it is not appropriate to determine at this stage whether the economic loss doctrine applies because plaintiffs have not yet had the opportunity to develop facts. However, the cases on which plaintiffs rely, Owen J. Roberts School District v. HTE, Inc., No. 02-7830,
. The economic loss doctrine does not apply to plaintiffs’ claim against HSBC Services because there is no privity of contract between plaintiffs and HSBC Services. Although courts often hold that the economic loss doctrine can apply even in the absence of contractual privity, Am. Stores Properties, Inc. v. Spotts, Stevens & McCoy, Inc.,
. Although some courts have disagreed with this conclusion, see In re Balko,
. Plaintiffs also argue that “the actions of each [d]efendant, as a scheme member, are attributable to each other for purposes of establishing liability.” (Pis.’ Opp’n Def. HSBC Mortgage Service Inc.’s Mot. Dismiss First Amended Class Action Compl. 16.) Although plaintiffs cite cases involving civil conspiracy to support this claim, plaintiffs have not asserted a claim for civil conspiracy. Without pleading facts demonstrating that HSBC Services itself engaged in a deceptive act, plaintiffs cannot state a claim under the UTPCPL against HSBC Services.