Norman v. Bank of New York Mellon Trust Company N.A. as Trustee of Mortgage…

Background

Gary Norman and Charmaine Thompson, representing themselves, sued Bank of New York Mellon Trust Company, N.A. as Trustee for Mortgage Assets Management Series 1 Trust (BONY); PHH Mortgage Corporation (PHH); Robertson, Anschutz, Schneid, Crane, and Partners, PLLC (RAS); Financial Freedom Senior Funding Corporation; Financial Freedom Acquisition LLC; and John Doe 1–12.

The dispute concerns property at 831 East 220th Street, Bronx, New York. In 2005, Reginald Blythewood executed a note secured by a home-equity-conversion mortgage on the property. The mortgage was assigned several times and was assigned to BONY in December 2021. BONY began a foreclosure action in Bronx County Supreme Court in June 2023 against heirs of Blythewood’s estate. That foreclosure action remained pending, and Norman and Thompson’s motions to intervene also remained pending.

The plaintiffs filed this separate action, asserting that Blythewood’s 2013 will named them as the property’s successors. They challenged the validity of the mortgage and sought exclusive possession and ownership of the property. Their claims included “Lack of Standing,” fraudulent concealment, intentional infliction of emotional distress, slander of title, quiet title, declaratory relief, and violations of the Truth in Lending Act.

Insufficient Service of Process

BONY, PHH, and RAS moved to dismiss under Federal Rule of Civil Procedure 12(b)(5) for insufficient service of process and Rule 12(b)(6) for failure to state a claim. The plaintiffs filed affidavits showing that they attempted service by certified mail.

The court held that certified mail was not a valid method for serving BONY or PHH under New York law or the federal rules. The plaintiffs had not personally delivered the summons and complaint to a person authorized to receive service and had not served the New York Secretary of State as permitted by applicable law. The court reached the same conclusion for RAS, which is a limited liability company, because certified-mail service was not authorized under the applicable New York law or the federal rules.

The court also stated that the Financial Freedom defendants had not appeared or moved to dismiss, but the plaintiffs’ affidavits likewise showed attempted service by certified mail. The court explained that such service was not proper for those defendants either.

Because more than 90 days had passed after the action was filed and removed, the court concluded that dismissal without prejudice was required under Rule 4(m). The court therefore granted the motion to dismiss under Rule 12(b)(5) and dismissed the complaint without prejudice.

Failure to State a Claim

The court additionally concluded that dismissal was appropriate under Rule 12(b)(6). Although a self-represented complaint must be read liberally, it still must allege enough facts to make a claim legally plausible.

The court held that the Truth in Lending Act claim was not adequately pleaded. That statute governs certain disclosures and rescission rights in consumer credit transactions, but the plaintiffs did not allege that they entered into a loan transaction with the defendants. Because the Truth in Lending Act claim was the only federal claim, the court stated that it lacked federal-question jurisdiction in the absence of a viable claim under that statute.

The court also addressed the remaining state-law claims. It held that “Lack of Standing” is not itself a claim; standing is a threshold requirement or defense. The fraudulent-concealment claim lacked particularized allegations of an intentional misrepresentation, reliance, or a duty to disclose. The intentional-infliction-of-emotional-distress claim did not identify conduct extreme and outrageous enough to meet the legal standard. The slander-of-title claim did not allege a false communication casting doubt on the plaintiffs’ title, and the notice of pendency did not qualify because it truthfully reported the pending action.

The quiet-title claim also failed. The plaintiffs did not allege that the mortgage’s enforcement period had expired, and the mortgage had been accelerated only in 2023 when BONY began the foreclosure action. The pending foreclosure action therefore precluded the asserted quiet-title theory under the cited New York statute. As to RAS, the complaint also did not allege that RAS had an adverse interest in the property; the court described RAS as BONY’s counsel in the foreclosure action.

Finally, the court dismissed the request for declaratory relief because the requested determinations overlapped with the other claims and with issues that would be decided in the pending foreclosure action, including BONY’s claimed rights and ownership of the property.

Ruling

Judge John G. Koeltl granted the motion to dismiss and dismissed the action without prejudice. The Clerk was directed to close the case. The court stated that arguments concerning whether foreclosure should occur could be raised in the pending foreclosure action, in which the plaintiffs had already sought to intervene.