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Nancy B. Mercado v. Bank of America

November 15, 2012


The opinion of the court was delivered by: William J. Martini, U.S.D.J.:


This is a mortgage fraud case. Nancy Mercado alleges that her mortgage broker, Defendant Joseph Salerno, falsified documents and left her with a mortgage she could not, and ultimately did not afford. In a ten count Amended Complaint alleging, inter alia, fraud and disclosure violations under the Home Ownership and Equity Protection Act, Mercado seeks money damages and rescission from Salerno and Defendant Bank of America, N.A. ("Bank of America"), the assignee of her mortgage. *fn1 This opinion considers Bank of America's motion to dismiss all claims pursuant to Federal Rule of Procedure 12(b)(6). There was no oral argument. Fed. R. Civ. P. 78(b). Bank of America's motion to dismiss is GRANTED in part and DENIED in part.


Nancy Mercado is a cleaner who makes roughly $25,000.00 per year. Am.

In 1999, Mercado took out a $241,000 home mortgage.

Compl. ¶ 22, ECF No. 3.

Id. ¶ 14. Her monthly payment was $1,634.00. Id. ¶ 15. In 2008, Mercado met Joseph Salerno, a mortgage loan officer with Hanover Funding. Id. ¶ 16. Salerno offered to help negotiate a "cash out refinance" that would allow Mercado to pay off her student debt and lower her monthly mortgage payments to $1,200.00. Id. ¶ 17. The refinance came with $30,000 in cash. Id. ¶ 19. Mercado accepted.

All did not go as planned. Salerno forged Mercado's W-2 to reflect an annual salary of more than $80,000.00-triple Mercado's actual salary. Id. ¶ 22. (The Amended Complaint uses the figure "$80,0000.00," which the Court interprets as eighty-thousand dollars.) Based partly on this forged document, Mercado qualified for the mortgage. She subsequently defaulted, id. ¶ 30, and her mortgage was assigned to Bank of America, id. ¶ 28(a).

At some point on or around January 4, 2011, a friend of Mercado's placed a telephone call to Bank of America's Fraud Unit. Id. ¶ 31. The friend explained that Mercado never gave Salerno the W-2 that was used in connection with Mercado's loan application. Id. Hoping to undo her refinancing, Mercado sent Bank of America a "Truth In Lending Act Rescission Notice" and a document she describes as a "Qualified Written Request." Id. ¶¶ 32-33. Bank of America refused to rescind the mortgage. Id. ¶ 35. Nine months later, this litigation was born.


Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975).

A complaint's factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level, such that it is "plausible on its face." See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). Claims have "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). While "[t]he plausibility standard is not akin to a 'probability requirement' . . . it asks for more than a sheer possibility." Id.


Mercado's Amended Complaint has ten counts. The first six counts sound in state law: fraud (Count I); breach of contract/warranty (Count II); violation of the New Jersey Consumer Fraud Act ("NJCFA") (Count III); negligence (Count IV); breach of the implied covenant of good faith and fair dealing (Count V); and breach of fiduciary duty (Count VI). The next two counts sound in federal law: violation of the Home Ownership and Equity Protection Act ("HOEPA"), and violation of the Real Estate Settlement Procedures Act ("RESPA"). A final Count, Count XII, alleges conspiracy and aiding and abetting with respect to the claims brought in Counts I-VIII. There are no Counts IX, X, or XI.

After Bank of America moved to dismiss all ten counts, Mercado submitted an opposition brief addressing only Counts VII and VIII. Citing to an unpublished decision from the United States Court of Appeals for the Third Circuit, Hollister v. U.S. Postal Serv., Bank of America argues that all counts except for Counts VII and VIII "should be deemed abandoned and dismissed." Def.'s Reply 3, ECF No. 12 (citing Hollister v. U.S. Postal Serv., 142 F. App'x 576, 577 (3d. Cir. 1992)). Hollister is unpublished, and therefore it is not binding. Moreover, it does not hold that when a plaintiff responds to some arguments for dismissal but not others, it abandons the counts it does not address in its opposition brief. Absent contrary binding authority, the ...

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