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Gunn v. First American Financial Corporation

United States District Court, Third Circuit

June 18, 2013

LA MAR GUNN, Plaintiff,
v.
FIRST AMERICAN FINANCIAL CORPORATION and DOUGLAS A. SHACHTMAN, Defendants.

La Mar Gunn, Dover, Delaware; Pro Se Plaintiff.

John A. Elzufon and Andrea C. Rodgers, Esquires; Elzufon Austin Reardon Tarlov & Mondell, P.A., Wilmington, Delaware; Counsel for Defendant Douglas A. Shachtman.

MEMORANDUM OPINION

RICHARD G. ANDREWS, District Judge.

Plaintiff La Mar Gunn filed this action alleging violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617; the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, and supplemental state claims for breach of contract and legal malpractice.[1] Gunn alleges that as a result of Defendants' negligence, he has incurred substantial injuries. He appears pro se and has been granted leave to proceed in forma pauperis (D. I. 7). The Court proceeds to review and screen the Complaint (D. I. 3) pursuant to 28 U.S.C. § 1915(e)(2)(B) and considers the Motion to Dismiss (D. I. 9) filed by Defendant Douglas Shachtman.

This Court must dismiss, at the earliest practicable time, certain in forma pauperis actions that are frivolous, malicious, or fail to state a claim. See 28 U.S.C. § 1915(e)(2)(B)(i)&(ii). The Court must accept all factual allegations in a complaint as true and take them in the light most favorable to a pro se plaintiff. See Phillips v. County of Allegheny, 515 F.3d 224, 229 (3d Cir. 2008). An action is frivolous if it "lacks an arguable basis either in law or in fact." Neitzke v. Williams, 490 U.S. 319, 325 (1989). Under 28 U.S.C. § 1915(e)(2)(B)(i), a court may dismiss a complaint as frivolous if it is "based on an indisputably meritless legal theory" or a "clearly baseless" or "fantastic or delusional" factual scenario. Neitzke, 490 U.S. at 327-28.

The legal standard for dismissing a complaint for failure to state a claim pursuant to§ 1915(e)(2)(B)(ii) is identical to the legal standard used when ruling on Rule 12(b)(6) motions. See Tourscher v. McCullough, 184 F.3d 236, 240 (3d Cir. 1999). However, before dismissing a complaint or claims for failure to state a claim upon which relief may be granted pursuant to the screening provisions of 28 U.S.C. § 1915, the Court must grant Gunn leave to amend his Complaint, unless amendment would be inequitable or futile. See Grayson v. Mayview State Hosp., 293 F.3d 103, 114 (3d Cir. 2002).

A well-pleaded complaint must contain more than mere labels and conclusions. See Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). The assumption of truth is inapplicable to legal conclusions or to "[t]hreadbare recitals of the elements of a cause of action supported by mere conclusory statements." Iqbal, 556 U.S. at 678. When determining whether dismissal is appropriate, the Court conducts a two-part analysis. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). First, the factual and legal elements of a claim are separated. Id. The Court must accept all of the Complaint's well-pleaded facts as true, but may disregard any legal conclusions. Id. at 210-11.

Second, the Court must determine whether the facts alleged in the Complaint are sufficient to show that the plaintiff has a "plausible claim for relief." Fowler, 578 F.3d at 211. In other words, the Complaint must do more than allege the plaintiff's entitlement to relief; rather, it must "show'' such an entitlement with its facts. Id. A claim is facially plausible when its factual content allows the Court to draw a reasonable inference that the defendant is liable for the misconduct alleged. See Iqbal, 556 U.S. at 678. The plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Id. "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief."' Id. (quoting Twombly, 550 U.S. at 570).

Because Gunn proceeds pro se, his pleading is liberally construed and his Complaint, "however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers." Erickson v. Pardus, 551 U.S. 89, 94 (2007) (internal quotation marks omitted).

This is another, in a series of lawsuits, filed by Gunn following the foreclosure of property he purchased that was encumbered by a first mortgage.[2] According to a complaint filed by Gunn in the Court of Common Pleas for New Castle County, Delaware, on April 17, 2006, he refinanced the mortgage on real property located at 201 Cornwell Drive, Bear, Delaware through World Savings Bank, which Wells Fargo acquired through a series of mergers.[3] See Gunn v. Wells Fargo & Co., Civ. No. 10-066 (D.Del.) (D.I. 16 at 2). Gunn alleges that on March 6, 2006, Defendant First American Financial Corporation issued a first lien title insurance policy on the property and that First American represented to him there were no liens on the property. Based upon First American's representation, Gunn "proceeded to incur indebtedness in the form of a $360, 000.00 mortgage." (D.I. 3, ¶ 6).

Gunn received a notice on December 12, 2006 from EQCC Home Equity Loan Trust 1998-2 that it intended "to proceed with foreclosure against the previous owners of the property, Leisa and Robert Johnson." (/d., ¶ 7). The same day, Gunn contacted his mortgage company, Wells Fargo Mortgage Corporation, to inform it of the alleged cloud on the title to his property.[4] ( Id., ¶ 8). Wells Fargo assured Gunn that the efforts of EQCC were fraudulent and that "he was in a first lien position, " and it assured Gunn that it would vigorously defend against any foreclosure by EQCC. ( Id. ).

On May 5, 2008, Wells Fargo advised Gunn that it would be filing a title clam against First American to protect [Gunn's] interest in the mortgage. ( Id., ¶ 9). Wells Fargo rescinded its prior position that it would challenge EQCC and suggested Plaintiff retain counsel. ( Id. ). On December 4, 2008, Plaintiff retained Shachtman to defend the EQCC foreclosure. ( Id., ¶ 10). Plaintiff alleges that "Shachtman failed to request authentication of a counterfeit document file[d] into the court and the local land record." ( Id. ).

Counts one, two, and three are raised against First American and count four is raised against Shachtman. Count one alleges that First American willfully violated RESPA when it misrepresented to Gunn that he was the first lien holder and that there were no other liens against the property. Count two alleges that First American violated the TILA when it misrepresented to Gunn that there were no existing liens that could compromise his first lien title position. Count three alleges that, because First American was paid to perform a title search and ...


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